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When it comes to tax time, many people cringe at the idea of going through the books and filing their taxes. But other creative filers see tax time as an opportunity to try to save some money and stretch the limits of tax law. While perhaps it is best to stick to legitimate tax-deductible expenses like vendor financing, here are a few of the most ludicrous tax claims that managed to pass through the Tax Court:
Sex Changes and Boob Jobs
If you are a transgender taxpayer with a gender-identity disorder or an exotic dancer looking to move up a few dozen sizes to 56 FF, your operations may very well be tax reducible. Rhiannon G. O’Donnabhai was convinced his male body was trapping the woman inside his soul and was reimbursed $14,500 from his $22,000 sex-change operation by the United States Tax Court in 2010. The court ruled that his/her sex change and hormone therapy qualified as deductible medical expenses because the procedures were helping to treat a disease. O’Donnabhai did not however manage to claim back his/her breast augmentation as the court saw this as non-deductible cosmetic surgery. Exotic dancer Cynthia Hass – also known by her rather apt stage name ‘Chesty Love’ – proved luckier than O’Donnabhai. In 1994 Hass was allowed to claim a $2,088 depreciation deduction on her 20 pound fake boobs. The court ruled that their gargantuan size made them a business investment as they were so aesthetically ridiculous they could not possibly be considered a personal indulgence.
Sunning on the beach in Bermuda
If you are working in the US you can claim back any business convention held in the island of Bermuda. Described by Mark Twain in the 19th Century as being ‘better than heaven’, this tropical paradise has an international agreement with the United States to exchange tax information allowing business meetings from the US to be tax deductible. Other lucrative business destinations for your next AGM could include Costa Rica, Grenada and Jamaica. However do perhaps keep in mind that while you can deduct tax it is not tax credit so perhaps try not to lose touch with reality for too long!
Unsuccessful Tax Claims
Unfortunately, not all tax claims work. A doctor who considered playboy magazines as waiting room reading material was labelled as perverted rather than crafty while a man who tried to call Victoria Secret lingerie ‘protective clothing’ was not successful either. However a professional bodybuilder from Wisconsin who tried to claim $4,000 back on buffalo meat, body oil and protein shakes was told that though the meat and shakes were stretching the claim, the oil was in fact tax reducible as it was ‘Professional Posing Oil’ marketed specifically for bodybuilders.
You just never know what you might get away with!
Author Byline: Sarah Paige writes on vendor finance and commerce. She is based in Sydney.
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