the oddest tax deductions the IRS has granted (HESS v. COMMISSIONER)

Most Americans know charitable gifts, retirement contributions, student loan and mortgage interest are tax-deductible, but what about cosmetic surgery?

It depends.

Over the years, the IRS has allowed some unusual tax deductions, but the circumstances were very specific. Basically, taxpayers must prove the items were necessary or a legitimate business expense. They can’t be personal expenses.

Here are examples of extraordinary deductions taxpayers have asked for and received from the IRS. It’s important to note that even though these were approved, we recommend you consult with a professional before pursuing any offbeat deductions.

Cosmetic surgery is usually a personal expense and isn’t tax-deductible.

In 1994, however, self-employed exotic dancer Cynthia Hess (aka Chesty Love) won her tax case allowing her breast implants in 1988 to be considered a legitimate business expense and could, therefore, have the cost be deducted. She argued that they were necessary to earn a living and that she otherwise wouldn’t have enlarged her breasts “to such an extent that they made her appear 'freakish.'” 

The court decided the breast implants satisfied a two-part test: (1) required as a condition of employment and (2) unsuitable for everyday use. The breasts were analogous to a “costume,” necessary for her job to make money, and because of how large they were, they were unsuitable for everyday use but unable to be removed daily. 

The Revenue Increase:

In 1986 and 1987, she used the stage name "Tonda Marie". At that time, she grossed from $416 to $750 per week.

At the urging of her agent, in 1988, she underwent multiple medical procedures to replace and to substantially enlarge her implants, and which finally expanded her bust size to an abnormally large size (56FF).

During 1988, she was reintroduced into the market under the stage name of "Chesty Love". At that time her fees almost doubled.

The Proof: “Ordinary & Necessary”

The sole reason she enlarged her breasts to such a horrendous size was to increase her success(her income) as a professional exotic dancer.

These costs were not "incurred for the convenience, comfort, or economy of the individual in pursuing [her] business." The implants are not the usual breast implants that women seek to enhance their personal appearance. Rather, in pursuit of additional income, had inserted implants that augmented her breasts to such an extent that they made her appear "freakish".

The Decision:

Because petitioner's implants were so extraordinarily large, “we find that they were useful only in her business. Accordingly, we hold that the cost of petitioner's implant surgery is depreciable. The propriety of petitioner's method or rate of depreciation or the useful life of the implant surgery was not in issue.”