April 16, 2012 : Jenna Bromberg - Past Contributor
The Strange Tax Deduction Hall of Fame
We’ve all heard the one about the exotic dancer who deducted the cost of, um, ‘enhancements’ as a business expense (and, legend has it, the IRS allowed it). But the itemized tax deductions people try to claim each year can get even more…creative.
Here are a few of our all-time favorite strange tax deductions — from the understandable (bath oil for dry skin) to the sketch (arson, anyone?)
Though most were given the sweet stamp o’ rejection, a handful of these bizarre tax deductions were actually allowed by the IRS.
ALLOWED: Organic food. In one case, the difference between the cost of chemically uncontaminated food and regular chemically-treated food was allowed as a medical deduction. Randolph, Theron, (1976) 67 TC 481
DENIED: Carpet removal. An allergic taxpayer tried to deduct the removal of carpets as a medical expense. It was denied — as was the cost of installing hardwood floors in their place. Mitic, Ilija, (2000) TC Memo 2000-144
DENIED: Salad. The cost of lettuce & tomato was not allowed as a medical expense for a diabetic on a restricted diet. The same person also tried to deduct artificial sweeteners and reduced-salt foods. Nope! Harris, J. Willard, (1966) 46 TC 672
ALLOWED: Boarding school. Travel, room & board were allowed as medical expenses for sending a young child with respiratory problems to a boarding school in Arizona. Stringham, L. Keever, (1949) 12 TC 580
DENIED: Air-conditioned hotel room. A one-night stay in a hotel was not allowed as a medical expense for an asthmatic taxpayer with a broken air conditioner. IRS Letter Ruling 8317035
DENIED: Bath oil. A dry-skinned taxpayer tried to deduct the cost of bath oils as a medical expense. Not allowed. Jefferson, Earl v. U.S., (1973, DC GA) 32 AFTR 2d 73-6053
DENIED: Memory theft. A taxpayer was denied a theft loss deduction for the theft of photographs, souvenirs, college papers, and other “memories” she claimed her landlord had illegally removed from storage and thrown away. Wang v. Comm. (T.C. Summ. Op. 2004-119)
DENIED: Broken china & glassware. Dishes were broken by the family pet. Bummer, for sure — but it wasn’t considered deductible as a casualty loss. Diggs, Robert, (1959) TC Memo 1959-99
DENIED: Dog boarding costs. Denied as a business (travel) expense while the taxpayer was away from home. Baratelle, Kenneth Andrew, (2000) TC Memo 2000-359
DENIED: English setter. The dog ran away. Casualty loss deduction disallowed. Smith, Waddell, (1948) 10 TC 701
DENIED: Dentures. Though a set of false teeth enabled an actor to enunciate without a hiss, they were not allowed as a business deduction. Sparkman, Edward v. Com., (1940, CA9) 25 AFTR 285
DENIED: Dancing lessons. Not deductible as medical expense to improve varicose vein problem. Adler, Irving v. Com., (1964, CA9) 13 AFTR 2d 1175. Also: not deductible as medical expense to ease arthritis and a nervous condition. France, Rose, (1980) TC Memo 1980-215
ALLOWED: Posing oil. A professional bodybuilder was allowed a business deduction for “ProTan Muscle Juice Professional Posing Oil.” Note: The same taxpayer was denied deductions for buffalo meat and vitamin shakes. Wheir v. Comm. (T.C. Summ. Op. 2004-117)
DENIED: Mink coat. Not allowed as a business deduction for taxpayer’s wife to wear to business functions. Jackson, Paul, (1954) TC Memo 1954-235
DENIED: Arson. A Pittsburgh, PA owner of a failing furniture store paid an arsonist to burn down his store. He reported the insurance as income, but deducted the $10,000 paid to the arsonist as a “consulting fee”—and admitted fact that to the IRS on audit. Yeah.