👋 Happy Tax Week, 'Stache Fam!

Your inbox is drowning in "last chance to file!" emails, and your accountant is haunting your dreams, so we're skipping the deadline reminders entirely.

Instead, we dug through decades of Tax Court records to bring you five of the most unhinged, jaw-dropping tax stories in American history.

Let's go.

A California woman fostered 70 feral cats through a registered 501(c)(3), and spent $12,000 of her own money on vet bills, food, and litter doing it. She claimed it all as a charitable deduction. The IRS balked.

Tax Court disagreed. Because the charity was legit and the expenses were directly tied to her volunteer work, she got roughly 90% of her deduction. The other 10%? Couldn't prove it.

The takeaway: Unreimbursed costs from volunteering with a registered 501(c)(3), including fostering animals, may be deductible. Just save your receipts.

A San Jose couple owned a rental condo in Mammoth Lakes. Six hours away by car, one commercial flight a day. So they bought a plane and deducted the fuel and depreciation. The IRS called it absurd.

Tax Court didn't. Every trip had a documented business purpose, like inspecting the property, meeting tenants, or handling repairs. The court ruled it a legitimate business expense.

The takeaway: The IRS doesn't care how you get to your rental property, just why. Document the purpose of every trip. (We're not saying buy a plane. But if you do, keep a flight log.)

June Kingsley wanted to volunteer for a registered charity but needed a babysitter to do it. So she deducted the sitter's fees as a charitable contribution, arguing that without the sitter, the volunteer work wasn't possible. The IRS said no immediately.

Tax Court said yes. The sitter's fees were an unreimbursed, essential cost of her volunteer work, same as gas money for driving to a shift.

The IRS still officially disagrees with this ruling. IRS Publication 526 says childcare costs aren't deductible as charitable contributions, so this one lives in legal gray territory. Tax Court said yes; the IRS says no.

The takeaway: Standard volunteer expenses (mileage, supplies, uniforms) are generally deductible. The babysitter angle? Proceed with caution, but the precedent exists.

A millionaire investment manager ($20M+ annual income) ran a donkey breeding operation on the side. For nine straight years, it lost money. The IRS invoked the hobby loss rules and denied every deduction.

Tax Court disagreed. The operation was still in its "startup phase," the judge ruled, and the taxpayer genuinely intended to turn a profit someday.

The takeaway: Hobby loss rules aren't automatic. The IRS has to prove you lack a profit motive, and the court looks at the full picture, not just your win/loss record. Document your business plan, your efforts to improve, and your intent to profit.

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A landlord hired his live-in girlfriend to manage his rental properties, finding tenants, sourcing furniture, coordinating repairs, and deducted her $9,000 salary as a business expense. The IRS was skeptical.

Tax Court split the difference. Her work was real, but not all of it was business-related. The court allowed $2,500. The other $6,500 was classified as payment for "nondeductible personal services." The court didn't elaborate. Neither will we.

The takeaway: You can hire family members or partners, and their wages can be deductible, but the work must be real, documented, and reasonably compensated. If you're paying someone you live with, the IRS will look closely. Keep job descriptions, time logs, and receipts.