A Little Tax Humor to Ease the Pain
“This is too difficult for a mathematician.
It takes a philosopher.”
— Albert Einstein, upon reviewing his tax return
Former Swedish pop band Abba was known for its outlandish stage costumes: glittery hot pants, sequined jumpsuits, and platform heels. Ever wonder why they wore those ridiculous outfits on stage?
It turns out the Swedish tax code allowed them to write off the costumes as a business expense so long as they were too outrageous to be worn on the street.
Here are four more hard-to-believe tax stories:
Slippery Proposition
From 1999 to 2001, a Wisconsin bodybuilder deducted more than $13,000 for body oils and tanning products.
The U.S. Tax Court allowed the deductions as a business expense because the oils were primarily marketed in bodybuilding magazines and not sold to the general public.
Lest the tax court be viewed as a softie, it disallowed deductions for buffalo meat and special vitamin supplements to enhance the bodybuilder’s strength and muscle development.
That Bites
1930s film star Ned Sparks attempted to deduct $3,000 for two sets of dentures as a business expense, claiming he needed them to enunciate properly for his profession. Without them, he attested, he spoke with a slight hiss which would be fatal to his career.
But the IRS wasn’t biting.
The U.S. Tax Court disallowed the deduction, claiming Sparks couldn’t prove the dentures would only be used for business purposes.
Instead, it agreed with the Board of Tax Appeals that earlier stated, “It would be difficult to imagine anything more personal than a set of false teeth.”
Crash and Burn
A Pittsburgh shopkeeper with a failing furniture business hired an arsonist to burn it down. He might have gotten away with it, too.
But in addition to reporting the $500,000 insurance payment on his tax return, the disgruntled store owner tried to write off the $10,000 “consulting fee” he paid the arsonist. It didn’t take the IRS long to catch on.
He got slapped with more than $6,000 in fines. Then, both he and the arsonist were hauled off to prison for insurance fraud.
That’s Rich!
In 2010, the U.S. Tax Court charged a prolific eBay seller with intentionally failing to keep records of more than $41,000 earned on the site between 2004 and 2005. “That would be ridiculous, unheard of,” the seller told the court.
“Unless there was some really bizarre reason why I kept a receipt, there were no receipts.”
She claimed she didn’t know her eBay activity constituted a business or that she was required to keep any records.
The court might have bought her excuse if it hadn’t been for her day job at the time: she was an IRS revenue officer.
It’ll Cost Ya
Perhaps what the government really needs is a new tax that few people would complain about. Here’s an idea:
Sources:
Featured Image: Adobe, License Granted
The Guardian
Wise Bread
Kiplinger
Bench Accounting