The Dolans
Jamie Koslow, AOL
Tax time is upon us, and we'll all be looking for ways to cut how much we'll owe the IRS.

While you should definitely take advantage of every deduction that you're entitled to, there's also a limit on how far you should push things.
Join personal finance experts, Ken and Daria Dolan of Dolans.com, as they check out some, ahem, "interesting" deductions.

The IRS refused some of these, but you won't believe the ones that were accepted.
Read on and see if you can guess which crazy tax deductions Uncle Sam allowed.
Beer Good, Whiskey Bad

A gas station owner gave his customers free beer and tried to write it off as a business expense.

(Hopefully the customers didn't drink the beer until they got home!)

Do you think the IRS took kindly to that?

The whole thing ended up in tax court, but the final ruling said the beer was a legitimate expense and deduction.

Interestingly, an Oklahoma businessman tried to deduct several cases of whiskey that he gave to his clients -- as "entertainment." This deduction, however, was flatly denied.

If you think that makes no sense, this next deduction is sure to fire you up.

Burnin' Down the House

A Pittsburgh furniture-store owner had tried to sell his business for years, but there weren't any takers.

Frustrated by his lack of success, he hired someone to burn the store down. He collected $500,000 from the insurance company for his misguided effort.

Incredibly, the man went on to deduct the $10,000 that he paid the arsonist as a "consulting fee." An IRS audit two years later ended with both men in prison.

Apparently, the IRS agent who handled the case was hot under the collar about the whole thing. Ba da bum.

We're Headed to the Super Bowl

Normally if you take a business trip, the location has to have something to do with the reason for the trip.

Someone should have told that to the person who tried to deduct a Super Bowl getaway and party for clients and their spouses.

Because the taxpayer could not prove that the trip related to business, the IRS denied the deduction.

Actually, the tax commissioner went on to say there "was no way" that the group discussed any business during the game.

Not all trips are denied, though ?

Dairy Cows ? on a Safari?

The owners of a dairy business went on an African Safari and tried to write the cost off as a business expense.

They justified the deduction by saying that many of the dairy's promotional activities and marketing efforts included wild animals.

We're not sure that "wild dairy cows" exist, but guess what? The IRS agreed that the trip was "ordinary and necessary," and the deduction was allowed.

It looks like those folks really knew how to "milk" the system!


Thanks, Doc! Come by for a Swim Anytime

A doctor told his emphysema patient that the sick man needed to start exercising.

The patient decided to install a swimming pool at his home, and then he deducted the cost as a "necessary medical expense."

The IRS agreed with the deduction, not only for the pool, but also for the various chemicals, cleaning, heating and upkeep. No word on whether he could write off his suntan lotion, though.

Did She Tango Her Way Home?

While the IRS looks favorably upon swimming pools, it doesn't look like you'll see the tax man on the dance floor anytime soon.

Despite her thinking that learning how to dance would improve her varicose veins, the government wasn't about to let this taxpayer deduct the cost of her dance lessons. The reason? "Not medically necessary." The IRS also frowns up dance lessons for the treatment of arthritis or nervous disorders.

No, You Can't Deduct Fido's Daycare

There are about 75 million household dogs in the U.S. That means millions of pooches are left at home alone each day.

To ease his pup's unhappiness, one taxpayer hired somebody to come to his home and watch his dog while the owner went off to work.

The IRS howled, however, when the taxpayer tried to deduct the cost by using a day-care tax credit intended for children and legal dependents. Pets do not qualify.

Maybe the IRS just prefers cats ?

"Here, Kitty-Kitty-Kitty!"

These junkyard owners had finally had enough of a nasty snake and rat problem, so they cleverly set out bowls of pet food each night to attract wild cats.

The cats not only ate the pet food, they also took care of the junkyard's unwanted guests. Because the wild cats made the business safer for customers, the pet food was deductible as a business expense. Sounds like the purr-fect solution!

We've had a little fun with this topic, but the truth is that taxes are no joke. This tax season be sure you pay your fair share but not one penny more. Start by making sure you take every single deduction to which you are entitled.

Nationwide, 4.1 million taxpayers miss taking education credits and deductions, and 7.3 million taxpayers miss claiming the Earned Income Tax Credit, and it goes on and on.
2009-12-08 13:44:44

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