Certain drugs qualify as legitimate medical deductions. But when they're recreational drugs, like say cocaine or ecstasy, the expenses are a little harder to slip by the IRS.
Dave Spaulding, an enrolled agent at Janover LLC, a financial planning firm, said clients who were in a rock band actually tried to deduct an item labeled "drugs" as "travel & entertainment" expenses.
The total cost of the "drugs" was in the high five-figures, and the band didn't even try to disguise them as prescription or medical drugs.
"The band's bookkeeper had concluded that the cost of recreational drugs was necessary and ordinary," he said. "Apart from admitting to possession of illegal drugs, the IRS would strongly differ with their tax position."
Needless to say, Spaulding's firm removed the deduction from the band's tax form.
Call it extreme communication. One taxpayer was so distrustful of technology that he wouldn't use a telephone or computer.
That posed a problem when it came to communicating with his business partner, who lived across town in Phoenix. So he came up with a plan: carrier pigeons.
The two now send messages to each other via the birds. And the technophobe thought it made sense to write off the pigeons, as well as their care, food and housing, as a business expense.
Shauna Wekherlien, the CPA at Tax Goddess Business Services who prepared his return, said she asked him a lot of questions (like whether he has ever owned a computer) to establish whether he had ever used technology to communicate with people in the past.
He said he hadn't, so she determined that the deduction was fair game, given that it was the only way he could reach his business partner.