Tuesday, June 21, 2011

In Praise of Cat Ladies and Charitable Tax Deductions

I have known many cat ladies in my life-my mother and my former assistant for starters, so I read the headline in last Saturday’s Wall Street Journal “A Cat Fancier Finds a New Way to Skin the Tax Man” with mild curiosity. What I discovered is good news for anyone who wants to know how to properly claim a charitable tax deduction for unreimbursed expenses incurred for volunteer work.

In the reported case before the U.S. Tax Court, Jan Van Dusen successfully challenged the IRS disallowance of $12,000 in expenses she incurred in caring for over 70 stray cats for a local IRS approved cat rescue organization,. The key, according to the article, is to keep detailed receipts and (this is important) to secure a letter from the charity acknowledging the gift. The donor has to secure the letter before the tax return is filed. Again, the charity has to be approved by the IRS.

This really seems to be an important victory for all types of volunteers and the charities that depend on them. As always, check with your tax professional.

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