Hey, They Tried: Tax Deductions that Wouldn’t Fly | AccountingWEB

Hey, They Tried: Tax Deductions that Wouldn’t Fly

If you’ve ever thought about claiming your dead parents as dependents, think again.

An elderly client of CPA William Philbrick believed she met the five tests to claim dependents on her tax return.

Philbrick, a former IRS revenue agent, said the woman reasoned that her dead parents hadn't filed a tax return, they weren't being claimed by anyone else, they were related to her and they didn't have any gross income. The woman even went so far as to produce a perpetual care contract and claimed, "I provided 100 percent of their support," Philbrick told the Washington Post.

"Obviously, she didn't apply common sense," said IRS spokeswoman Michelle Lamishaw. "When filling out your tax return, you don't want to turn it into an exercise in creative writing. That belongs in an English 101 class, not in the world of taxation."

A few other outlandish attempts at tax deductions gathered from the California Society of CPAs:

  • Gregory Reid of Laguna Niguel said he had a client who tried to claim a can of pepper spray as a medical deduction. The woman said she had a weak heart and would surely die if she ever was attacked.
  • Teresa Mason of Oakland had a client who tried to deduct his lottery ticket purchases as donations to the California school system, which the lottery supports.
  • Steve Kramer of San Diego said a union meat cutter client tried to deduct the cost of his new wristwatch, which he said he bought only to get to work on time and leave precisely at the end of his shift. The client thought he could deduct the watch as part of his uniform.

Here are a few deductions that worked:

  • Robert Seltzer, a CPA in Beverly Hills, had a client with a neck injury who deducted much of the cost of installing a lap pool because swimming was the only exercise permitted by his doctor.
  • Michael Allmon, a CPA in Marina Del Rey, had a famous actress client in her early 20s who was able to deduct the costs of a personal trainer and health club expenses for the time it took her to lose weight, as ordered by her studio.

The IRS warns taxpayers not to get too creative.

"You don't want to have too much of a sense of humor when filling out your tax return," Lamishaw said, "because the consequences are not at all funny."

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