annual installment of the year's craziest, laughably outrageous,
utterly true tax deduction tales, culled from the seasonally
imbalanced minds of certified public accountants from across the
land, some of whom requested anonymity.
Past forays into tax return weirdness turned up some
very naughty behavior indeed as desperate taxpayers sought to slip
past the taxman everything from breast implants to barking security
systems and an expensive "time monitoring system" made by
Does it count if I wrote the checks
in there? Home office deductions
continue to entice would-be tax evaders. The rule: Improvements to
the office portion itself are deductible; improvements to the rest of
the house may be
reimbursed based on the percentage of total square feet
devoted to the office. But one of Sibley's clients had other
"The most troubling return was a lady that was
self-employed who demanded that she get to deduct more than $30,000
she had paid in remodeling her home," says Sibley. "The
only trouble was, the area that was remodeled did not include her
actual home office."
Wholly unholy travel expenses - Dallas
CPA Ken Sibley has represented his fair share of country preachers
over the years, pious seekers who, for the most part, hewed closely
to the path of righteousness. Then came one holy man whose travel and
entertainment expenses sought the off-road shortcut to tax savings.
"The minister, new to us, wanted to take travel and
related costs incurred when the full family traveled the country
looking for real estate investment property," Sibley says.
"But none was ever found, and none had been purchased for the
past several years." Maybe he was searching for the
I'm just a giving kind of guy - Ah,
the wedding tale! This nondeductible expense ploy pops up every year
in different guises, sort of like those bridesmaid gowns that come in
colors not found in nature that you'll never wear again. Most try to
squeeze that $50,000 whopper into business travel and entertainment,
or T&E, expenses ("Hey, I invited my clients!"), but
some just want it any way they can get it.
"I had a client who insisted on deducting the cost
of his wedding," says a Massachusetts CPA. "He could not
understand why this was not deductible, and I could not understand
where he expected to record it. As a charitable donation? Like he was
nice enough to marry her?"
What would Tony Soprano do? - Sometimes
tax preparation can involve some off-the-books negotiation, as Don
Meyer of the New Jersey Society of CPAs relates.
"The manager and family member of a famous
entertainer recommended the purchase of a $2 million building for
office and production space, confident that it would be a $2 million
write-off for tax purposes that same year," Meyer says.
"When the manager found out the truth -- that it would take over
30 years to recover the expense -- the manager was upset, embarrassed
"At one point in the drama, a suitcase with a very
significant amount of cash appeared as incentive for the accountants
to somehow 'make it work.' The suitcase full of money was refused and
the extravagant claim never made it onto the tax return -- at least
not the one the accountants prepared before they resigned the
A little off the top -- of my taxes
- Some taxpayers just get a wild hair when it comes to
shaving their tax burdens.
"I was preparing a tax return for a state trooper
who was trying to deduct everything under the sun," says another
Massachusetts CPA. "He had listed haircuts as a deduction. I
asked him why he thought haircuts were deductible. He replied that
his hair had to be cut short as a requirement of his job."
"I responded that your employer probably requires daily bathing,
too, but you can't deduct the soap."
He'd better be a doctor or a porn
star - The self-employed sometimes take
liberties with the dues and subscriptions deduction, as this
Massachusetts CPA found out by accident.
"A self-employed real estate professional had
thousands of dollars in dues and subscriptions. When we reviewed the
details of the account, the client was trying to deduct some personal
subscriptions to adult magazines. We convinced the client to treat
those items as a nondeductible personal expense."
Superman comics for you - What good are tax codes if
they stand in the way of saving all mankind?
"A member of my church wanted to confirm that he
would be able to take a tax deduction for his donation of sperm to a
sperm bank," recalls a Massachusetts CPA. "He was about to
have prostate surgery and he feared he might be impotent afterward,
so he wanted to preserve his sperm for future generations."
"His reasoning was that the gift of his sperm was
such a value to humankind that he should surely be able to take a tax
deduction for it."
A public relations scandal - "A
call girl who wanted to report her income so she won't get in trouble
with the IRS told her accountant her occupation was in public
relations," Meyer says.
Well, they both involve billable hours...