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Tax Court Rules Prostitutes Aren't Deductible - Forbes.com
:rofl:
Lawyer kept records, claimed visits as medical expense.
The U.S. Tax Court ruled Monday that Brooklyn, N.Y. tax lawyer William G. Halby, 78, had no legal basis to deduct prostitutes and pornography as medical expenses on his federal tax returns. Judge Joseph Robert Goeke upheld the Internal Revenue Service's determination that Halby owed $21,000 in back taxes plus $4,000 in accuracy-related penalties for his disallowed write-off of $120,000 of what the court delicately (and in quotations) called "service providers" as well as pornographic materials.
According to the opinion, Halby did maintain careful records as is generally required for deductions. He "kept track of these visits in a journal," the court said, logging in dates, names and amounts, although there's no mention in the opinion that the prostitutes provided receipts. To his tax return's Schedule A, used to claim medical deductions, Halby added an attachment that provided "only vague descriptions of the types of costs" he was trying to deduct.
According to the Tax Court opinion, Halby, who represented himself, argued the costs should be allowed because of "the positive health effects of sex therapy." But the court said no doctor had prescribed this treatment for Halby, who also "did not discuss these visits with his doctors afterwards to determine their impact on his health."
:rofl:
Lawyer kept records, claimed visits as medical expense.
The U.S. Tax Court ruled Monday that Brooklyn, N.Y. tax lawyer William G. Halby, 78, had no legal basis to deduct prostitutes and pornography as medical expenses on his federal tax returns. Judge Joseph Robert Goeke upheld the Internal Revenue Service's determination that Halby owed $21,000 in back taxes plus $4,000 in accuracy-related penalties for his disallowed write-off of $120,000 of what the court delicately (and in quotations) called "service providers" as well as pornographic materials.
According to the opinion, Halby did maintain careful records as is generally required for deductions. He "kept track of these visits in a journal," the court said, logging in dates, names and amounts, although there's no mention in the opinion that the prostitutes provided receipts. To his tax return's Schedule A, used to claim medical deductions, Halby added an attachment that provided "only vague descriptions of the types of costs" he was trying to deduct.
According to the Tax Court opinion, Halby, who represented himself, argued the costs should be allowed because of "the positive health effects of sex therapy." But the court said no doctor had prescribed this treatment for Halby, who also "did not discuss these visits with his doctors afterwards to determine their impact on his health."
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