IRS tax attorneys following the Oakland, California “Cat Lady” tax case, report that Ms. Jan Van Dusen (a.k.a. Cat Lady) has beaten the IRS in U.S. Tax Court. The case, which ended-up going to Court in 2009, was the result of the IRS’s refusal to accept Ms. Van Dusen’s 2004 attempt to use expenses relating to the care and feeding of approximately seventy (70) stray and feral foster cats as a tax deduction.
Ms. Van Dusen, a volunteer with “Fix our Ferals” is a fifty nine (59) year old, former California family law attorney, who took her fight to Tax Court over the IRS’s rejection of her $12,068 tax deduction. IRS attorneys say the Agency took the position the expenses were not deductible and refused to reconsider prior to the Court’s decision.
The ruling, according to IRS tax lawyers, is a tremendous victory for animal rescuers who typically spend hundreds, if not thousands of dollars of their own money to help save abused and/or abandoned animals. In fact, the Humane Society reports that many of its volunteers spend anywhere from between $2,000 and $15,000 per year of their own money trying to help needy animals.
IRS attorneys caution, however, animal rescuers should keep all of their receipts for any and all necessary expenditures. Further, these same IRS attorneys point out that a volunteer seeking to claim such a deduction, must be working with a recognized 501(c)(3) charity, their work must be furthering the charity’s mission, and if their expenses are going to exceed $250, the volunteer must also have a letter from the charity acknowledging the work was required.
The Tax Court’s decision establishes a “precedent for animal rescuers nationwide” according to Vania Maldonado, at Examiner.com, and several IRS tax attorneys following the case. IRS attorneys suggest the precedent may be much more far reaching than just volunteers incurring expenses for animal rescue charities. The Court’s forty two (42) page decision implicates the possibility of claiming as a deduction any appropriate personal expenses incurred by volunteers affiliated with any approved 501(c)(3) charity.
If you are a volunteer working for an approved charity, and you’ve incurred out-of-pocket expenses for which you are now claiming on your tax return, you are encouraged to keep good records and get a letter from the charity explaining that your work was necessary to further the charity’s mission. If you have questions, consider consulting with a competent IRS tax attorney to get the answers you need.
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