Jan Van Dusen, a volunteer for a cat rescue program, recently went to battle with Tax Court to deduct expenses for the care of some 70 plus cats. The article Stray Cat Strut: Woman Beats IRS published in the Wall Street Journal outlines how Ms. Van Dusen won her case against the tax court in her argument for the deduction for over $12,000 in bills accumulated for the care of the cats for the IRS approved charity Fix Our Ferals. The list of expenses included vet bills, litter, food and supplies all towards the care of the feral cats.
What makes this case so interesting is that is setting a new precedent for volunteers all over the country to claim tax help in the form of deductions for the money spent on supplies for the care of animals for IRS approved charitable services. According to the article:
“The decision, in Van Dusen v. Commissioner, paves the way for volunteers of animal-rescue groups like the ASPCA and Humane Society of the U.S. to deduct unreimbursed expenses that further the groups’ missions, such as fostering stray animals.”
The case also helps to clarify the rules for making charitable deductions over $250; proper documentation from the charity must be in the hands of the taxpayer before the filing date outlining the extent of the donation. This also extends to other charities, not just those involving the care of animals:
“Previously, some accountants advised clients taking such deductions to be prepared for an IRS challenge. Now, “if you host and pay for a catered fund-raiser in your home, we know what to do,” said Laura Peebles, a director with Deloitte Tax in Washington. Specifically, the taxpayer must keep records of pertinent expenses, and the charity must write a letter acknowledging the gift.”
As always, the charity must be an IRS approved tax-exempt organization for the deductions to be approved, regardless of whether proper documentation is involved. Recently the IRS just released a new list of approved organizations on its website, in addition to list of a slew of others who have lost their status due to not filing the appropriate returns for 3 three years.
To read the entire article by Laura Saunders on Jan Van Dusen’s case click here.
Related posts: