Tempting (But Illegal) Tax Deductions

No one actually enjoys paying taxes, but most of us are resigned to paying what we have to. Some people, however, really hate it, and they devote a lot of imagination and brainstorming to find ways to pay less.

One extremely popular method for lowering a final tax bill is to claim income tax deductions for some very unusual things – things that Uncle Sam either doesn’t allow or are out-and-out illegal.

Go Banking Rates went looking for examples of these outside-the-box and outside-the-law tax deductions, and here’s a sampling of what we found:

Pot Calling the IRS Black

A pot grower and dealer had the really smart idea to claim business expenses related to his criminal livelihood.

Surprisingly, the IRS rejected the tax deductions, and then federal marshals swept in and seized the place. See what happens to your brain when you do drugs?

Burning Down the House

One really, er, hot idea is to hire an arsonist, burn down your stuff, claim the lost stuff as a tax deduction — and then tell the IRS all about it when you try to claim the arsonist’s fee as another tax deduction.

This dim bulb is now probably sharing a cell with the pot farmer.

Habla Usted IRS?

A Spanish teacher tried to write off the costs of his monthly cable bill because he “only watched it for the Spanish-language” stations.

While there’s nothing illegal about this attempt at an income tax deduction, the IRS was not exactly loco about the whole idea, and the tax deduction was denied.

Claiming Your Kid’s Imaginary Friends As Dependents

A very common and very illegal tax deduction is to claim a dependent or dependents that you don’t have. Many people take a very liberal view of the idea, and even include their pets.

However, all that abuse lead to the IRS now requiring the Social Security numbers of each claimed dependent in order to be accepted. The law seems to have worked – in the first year that the Social Security numbers were required, the IRS saw up to 7 million fewer dependents claimed.