Outrageous Tax Write Offs That Worked

Every tax season we try to think of the past year’s expenses that can help lower our tax bill. A tax court may approve some business-related expenses, but others that walk the fine line between business and pleasure are likely to get rejected. But you should always learn about tax write offs that worked.

You Wrote Off What?

While lowering your tax bill is a common task, taxpayers should be careful so they don’t face IRS prosecution. A tax attorney could help you make your case, but it’s better to avoid the drama altogether.

Tax Write Offs That Worked

Some seemingly unworthy deductions have been approved by tax courts. The IRS may have been shaking their heads, but these outrageous tax breaks got the nod:

  • Comic books: One taxpayer worked the system to deduct the several thousand dollars he spent to buy comic books. The reason? A Ph.D. student, he used them to conduct research in his field of expertise. Most of us probably don’t care how comic books intertwine with society’s changing values, but it paid off for him.
  • Gender reassignment surgery: A taxpayer successfully deducted more than $14,000 in out-of-pocket medical costs for multiple sex change surgeries. The tax court allowed the deductions because it thought they would treat their disease, but the surgeries to give bigger breasts didn’t count. The court viewed them as cosmetic surgery and nondeductible.

Financial and Business

  • Bad loans: If your deadbeat friend didn’t repay that personal loan of several hundred dollars, you may be able to write it off. But not all bad personal loans qualify. You’ll have to show that you both signed a contract specifying how it would be repaid, that the terms were fair and that you tried to collect the debt. While knowing that the money is long gone is usually a bad thing, being able to show that to a tax court is necessary to use this deduction.
  • International business meetings: Do you sometimes dread having business meetings in a boring conference room? How about at a Bermuda resort instead? The U.S. and Bermuda share tax information through an international agreement, so you can move your meetings there without having to justify it. But it’s not just Bermuda. You can automatically write off your business meetings if they take place in Jamaica, Barbados, Canada, Mexico and some Central American countries. Same goes for any US possessions like Guam and Puerto Rico.

People think of creative tax deductions all the time, but there’s nothing creative about just not paying your taxes. Those years of pretending April 15 never existed will catch up to you as a wage garnishment or bank levy.

If you owe back taxes to the IRS, don’t get creative. A tax attorney can help you obtain an outcome that works in your favor, and while you might not make our list for most-creative deductions, it’s one list we encourage you to avoid.

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