Deductions you didn’t think existed!

As the time for filing your taxes is here, you might appreciate hearing about a few little known deductions which could arguably be available, if you qualify. These deductions involve things like cosmetic surgeries, body oils and that’s right, even beer as long as they are arguably work-related and/or advance your career/business interests!

Tax attorneys will tell you that ordinarily the IRS does not permit tax deductions for cosmetic procedures, but there are exceptions. Take the case of exotic dancer, Cynthia “Chesty Love” Hess who, in 1994, sued and beat the IRS because she took a $2,000 dollar deduction for her breast augmentation surgery which the IRS denied. Ms. Hess claimed that her breast implant surgery was work-related and that she had undertaken to have her breasts enlarged for the sole purpose of advancing her career. The U.S. Tax Court agreed.

In a remarkable opinion, written by Judge Joan Pate, the Tax Court noted that Ms. Hess’ new breasts weighed-in at approximately ten (10) pounds each and were so uncomfortable that the Judge concluded Ms. Hess derived no personal benefit from them and permitted her breast augmentation deduction as a “stage prop.”

Oils and tanning products are not usually deductible either, according to most tax lawyers, but if you are a body builder such items may arguably be claimed as work-related for tax purposes. Consider the Wisconsin bodybuilder, Corey Wheir, who in 2004 sued the IRS because it denied deductions he was claiming for bison meat, dietary supplements, body oil and tanning products.

Again, the U.S. Tax Court found that while the meat and supplements Mr. Wheir was claiming could be consumed by others, who were not body-builders (and as such, they were not allowable tax deductions), the oils and tanning products were a different story. Those items had been marketed exclusively through body-building magazines and were not generally available to the public through “normal marketing outlets.” Accordingly, the Tax Court accepted Wheir’s argument and allowed him to claim the body oils and tanning products as work-related deductions.

And then, of course, there is the story of the gas-station owner who tried to claim a tax deduction for beer he was giving away to motorists who filled-up their tanks at his station. In a judicial decision, which perhaps through inadvertence neglected to comment on the propriety of giving motorists free beer before sending them back on the highway, the Court concluded a business owner “can offer free beer to beer lovers” to improve business. As such, the beer was a legitimate business expense and could be deducted from the station owner’s taxes (see Sullivan v. Commissioner, 1982).

So if you have any questions about what deductions you may claim, or if you have unfiled returns, and/or you are concerned about how much back taxes you may owe, consult a competent tax attorney, or other tax professional, and get some advice about asserting the right deductions and getting those unfiled returns completed and filed, and resolving any back taxes before IRS wage garnishments, IRS levies and/or IRS liens complicate your ability to resolve your tax problems and settle back taxes which may be owing.

 

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

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