Itemization can be fun (interesting write-offs people have tried)
It’s getting close to tax time again. You know, the part of the year when you officially commit a large percentage of your income to the government. Usually the aim of most people is to pay as little tax as possible. One way to accomplish this is to write off as many expenses as you can. (Just so you don’t think I’m crazy as you read this post, they say write-off is supposed to be hyphenated when a noun and not when a verb.) The more you write off, the less your taxable income and the less taxes you pay. It sounds simple enough, right?
Not all the time. I have a degree in accounting and even though I’m not in the personal tax preparation business, I know it has to be hard to keep up with the constantly changing laws. There was once an exotic dancer who wrote off her breast implants as a business purchase. The IRS took her to court over it and lost. Some write-offs are obvious, some are very questionable. Here are a few stories of people who tried to write off some odd things. Some were successful, some… not so much.
A man in Pittsburgh decided it was time to do something else so he put his business up for sale. For several years he kept in on the market hoping for a fair price. It didn’t come. Frustrated, he went to the dark side. He hired a man to drop by late one night and burn the place down. The arsonist did his job and the man collected $500,000 in insurance money. He reported that on his taxes, which is all well and good, but he also wrote off a $10,000 “consultant” expense.
When he was audited a few years later, it was discovered that the consultant expense was actually the fee that was paid to the arsonist. They both went to jail. We’ll call this one a win and a loss.
A man in New York tried to take the term “sperm donation” a little too far. He was apparently a regular at the clinic and thought it should be considered a self-employment situation. He wanted to take a “depletion allowance”.
While it may be a depleting act, the IRS did not agree. No word on whether he later tried to claim the children conceived from his donations as dependents.
While you can’t depreciate yourself, you can depreciate those lower on the food chain. A man in Louisiana wanted to depreciate his ostriches. He cited the tax law that says livestock can be depreciated as long as they are used for breeding.
The IRS agreed and let him do it. Ostriches are now considered livestock and that’s fine with me. I had an ostrich burger once. It was yummy.
Only an out-of-touch rich person would try this: A few years ago a doctor was being audited. He was asked about a particular write-off. It was a deduction for a new piece of “time monitoring equipment” for his practice. When asked what this was for, the doctor paused, then answered.
It was for his Rolex.
There are a few examples of people writing off things they do on the weekends because the activities could be loosely tied to their occupation. In one instance, a professor of European art at an American university attempted to write off all his expenses for theater and gallery tickets. In another, a movie set technician tried to write off his movie rentals as “research.”
While those two were axed by the IRS, a student who did his doctoral thesis was able to write off thousands of dollars in comic book purchases because it was in his “field of expertise.” If that’s the case, I’m going to go back to school and study alcohol consumption.
Some people love their dogs a little too much. I have a wonderful Rhodesian Ridgeback, but she isn’t anywhere on my 1040. That is in direct conflict with what some people have tried to do. One man attempted to deduct his dog food expenses because he said his pet was a watch dog and the food should be considered a “security expense”. Anybody who has been to my house would laugh in my face if I said I was going to do that.
Another person who tried a canine deduction worked full time and did not want to leave her dog home alone. She tried to write off doggy day care expenses. Unbelievable. Knowing the kind of person who would try that, it was probably for a small, annoying dog that yips a lot, but that’s beside the point. Both were shot down by their respective accountants.
This one is the only truly legitimate write off on the list. I included it not for the strangeness of the deduction, but how it was brought up. You see, a man and his wife were in their CPA’s office to get their taxes done. The CPA asked the husband about some mortgage interest paid on a condo. The wife looked up and asked “What condo?”
The wife didn’t know about the condo because the husband purchased it without her knowledge. For his mistress.
So when you get ready to do your taxes this year, remember that there are many things you can write off if you itemize your deductions. Just be careful. Of the three above who were allowed their deductions, one is in jail and the other is probably paying a whole lot of spousal support.