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Today: December 26, 2024

LA accountant reveals shocking tax deductions IRS accepted from clients

LA accountant reveals shocking tax deductions IRS accepted from clients
March 12, 2024
Nahal Garakani - LA Post

The IRS has approved some shockingly bizarre tax deductions over the years - from breast implants for a stripper to private jets for efficient travel. Even cat food has been claimed as a business expense! While most filers claim basic deductions like mortgage interest, some taxpayers get creative and push the limits with unique write-offs. If they can prove an odd expense was truly essential for their work or medically necessary, the IRS auditors may just accept their questionable arguments.

But pursuing fringe deductions is risky business. Without ironclad justification, you could get slapped with penalties and back taxes instead. So is it worth trying to write off your swimming pool or gym membership as medically required therapy? Or claiming your pets as dependents? Read on for surprising real-life examples of way-out-there deductions taxpayers somehow swung past the IRS. You'll get insights from an accountant on what it takes to successfully argue for an unconventional tax break - without triggering an audit.

"Most people know tax deductibles include mortgage interest, retirement savings, and charitable donations. But some taxpayers have gotten very creative with more bizarre expenses that the IRS accepted," said John Smith, an accountant in Los Angeles. "If they can credibly argue it was essential for their business or income source, even some wacky deductions might get approved. But I always warn clients to consult a professional before trying to push the limits too far."

One of the most unexpected tax deductions approved was for an exotic dancer's breast implants in 1988. Under the stage name "Chesty Love," Cynthia Hess successfully appealed to classify her plastic surgery as a work-related cost rather than a personal cosmetic procedure. She credibly argued the implants were necessary for her employment as a dancer. The court agreed that the size enhancement met the test of being vitally required for her job and unsuitable for everyday use—making them effectively a costume crucial to earning ability.  

A California couple also convinced the IRS to green-light tax write-offs tied to their private jet ownership. John and Joanna French made the case that flying from San Jose to their rental property in Mammoth Lakes allowed efficient travel time, given their full-time jobs. Without the use of their jet, they would have relied on a single daily commercial flight taking less than 90 minutes total. Or they could have endured long car trips, taking 7 hours each way to personally attend to landlord obligations. Citing the extreme efficiency benefit, deductions were ultimately approved since the private plane facilitated direct rental property administration.

Even unusual pet-related expenses qualified in two documented cases. In 1995, a scrap yard owner named Samuel Seawright received a $300 deduction for cat food purchases. He credibly demonstrated that feeding local feral felines was a necessary business expense. Specifically, the critters kept snakes and rats away from the commercial property. Additionally, care and transportation costs for specially trained service animals may qualify as deductible medical expenses in certain situations.  

Gym memberships, swimming pool installation, and similar sports/fitness costs typically fail to meet write-off eligibility rules. However, patients can potentially deduct medical equipment, therapy, or facilities formally prescribed by a physician to alleviate symptoms or prevent health complications. As long as the treatment directly correlates to a diagnosed condition, the expenses may qualify as deductible medical care rather than personal costs.

Smith cautions taxpayers pursuing abnormal deductions to document qualifying business necessity or medical directives meticulously. "The key is having ironclad proof that the cost directly connects to making money or saving lives. As opposed to benefiting you personally for pleasure or convenience. Get something formal in writing from bosses, medical professionals, or other credible sources to be safe." He also advises working closely with accounting pros to follow proper deduction reporting protocols on tax returns.

While mainstream filers need not fret over justifying norm deductions, those pushing boundaries bear responsibility for claims. Unfortunately, unsuccessful appeals could trigger IRS penalties exceeding $1,000 plus interest on any owed back taxes. Thus, Smith warns clients to carefully weigh risks against potential payouts before doggedly pursuing fringe deductions. 

"It's tempting to take a chance getting the government to fund something wild like pool construction or cat food. Maybe once in a great while, it'll pay off with the IRS buying your argument. But auditors hate leaving potential money on the table," said Smith. So have all your justification perfected beyond doubt upfront. Definitely talk to an accountant or tax attorney to decide if the fight is worth it."

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