The Outrageous History of Outrageous Deductions

Trying to find loopholes in the tax code is nothing new. In one of the earliest examples of getting a tax refund, the legendary Robin Hood would ambush the sheriff’s tax collectors and then give the money to the poor. Not everyone takes it to that extreme, but who wouldn’t like to squeeze a little more out of the tax code? 

Here are some of the more outrageous deductions people have filed:

• If you want to lower your property taxes in Florida, the best way is to get a cow. Regardless of where you live, slap down a few sheep or cows on your land and you can qualify for the ‘agricultural’ discount on your property taxes.
• A couple who owed a junkyard put out cat food to attract wild cats. The IRS ruled it a legitimate business deduction since the cats helped keep mice and snakes off the property.
• One mother was able to get an orthodontist to proclaim that clarinet lessons corrected her child’s overbite. She wrote off the lessons as a medical expense.

Not every attempt at a deduction is successful. Here are a couple that didn’t make the grade:

• A furniture store owner, now serving time in prison, found out the hard way that the ‘consulting’ fee he paid a local arsonist to burn down his shop in order to collect the insurance payment was not deductible as an investment expense.
• One gambler was surprised to learn that gambling losses don’t count as charitable deductions to the casino or to the Minnesota state lottery.

As always, for more information contact an experienced and capable tax advisor.