Here, Kitty Kitty Kitty
Let’s hear it for Jan Van Dusen, who dragged the Revenooers into Tax Court (and beat their animal-sadistic hides) over the question of whether her “foster-cat” expenses entitled her to a charitable contribution deduction!
Seems Ms. Van Dusen cared for foster cats in her home, acting as a volunteer for Fix Our Ferals (FOF), a legit IRS-sanctioned charity. FOF recruited volunteers to foster cats while they were spayed or neutered, and also to provide sanctuary for kitties needing long-term care.
During the tax year in question, we hear Ms. Van Dusen took care of something like 75 cats, only seven of which were her own. Needless to say, this effort consumed a substantial portion of her time (outside of her legal profession), in not only caring for stray cats, but also in working closely with other FOF volunteers. And FOF kept a keen eye on her activities.
Her bottom line, therefore, was a claimed charitable contribution deduction of over $12 grand on the theory that her out-of-pocket was incurred on behalf of the charity.
Not so fast, said the Revenooers: those expenses had an “indistinguishable personal component.”
The Court, however, went along with the taxpayer, allowing about 90% of her claimed expenses, holding that the expenses did qualify as unreimbursed expenditures “incident to the rendition of services to a charitable organization.” Same theory under which many folks deduct more routine cash outlays (such as use of their auto) in connection with their good works for a favorite charity.
And we were thoroughly unamused, this week, to hear of Obama’s latest economic advisory appointment: Alan B. Krueger, just one more pointy-headed economics “perfessir,” as opposed to a real-world experienced bloke with financial savvy. Consider some of Krueger’s blather, published by the New York Times in early 2009:
“Here is a suggestion to address both the short-run and long-run problems (with the country’s economy). I pose it only as a suggestion for serious discussion; I’m not sure it is the best way to go (We’re sure it isn’t.-ed). But here goes: why not pass a 5 percent consumption tax to take effect two years from now? There are many different ways to implement a consumption tax, but for simplicity think about a national sales tax. In the short run, the anticipation of a consumption tax would encourage households to spend money now, rather than after the tax is in place.
Along with the rest of the economic recovery package (And don’t we all know, now,how well that went over!-ed), this would help jump-start spending in the economy and thereby increase production and employment. In the long run, a 5 percent consumption tax would raise approximately $500 billion a year, and fill a considerable hole in the budget outlook. In addition, a consumption tax would encourage more saving in the long run. Many economists consider a consumption tax an efficient way of raising tax revenue, especially in a global economy. The prospect of greater revenue flowing into federal coffers would probably help lower long-term interest rates because the government would need to borrow less down the road, and further bolster the economy.”
How nice – and no mention of replacing the existing onerous tax structure with this grand new scheme.
CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters. You should consult your CPA regarding the implications to your own particular situation.
Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno. He may be reached at 831-7288, welcomes comments at firstname.lastname@example.org, and invites readers to consider his other commentary at http://blog.nolo.com/taxes.