It fell to Hatter to inform her that she could only deduct up to 50 percent of her adjusted gross income.
"We wound up with something like $15,000 in contributions," he says. "I just knew that that return was going to get audited, but it never did."
3. At least it wasn't 'Travel & Entertainment'
Sometimes business owners will try to slide a fast one by the IRS by classifying a business deduction in a category where the dollar signs might not raise an eyebrow.One such fastball didn't pass the eyebrow test with this Oklahoma accountant, however.
"We were reviewing a business client's accounting entries and noted a check for over $2,000 written to a gynecologist. It was classified on the business books as 'repairs and maintenance.'"
4. Bubble bath credit
Taxpayers sometimes get into hot water by deducting their spas and swimming pools, either as medical deductions or, more boldly, as business expenses."We had a woman who tried to deduct her tricked-out Jacuzzi hot tub due to medical reasons," says Elizabeth Dittrick of Dittrick and Associates in Cleveland. "That can be a legitimate expense -- but not the underwater speakers, the mood lighting and the in-tub stereo. So we ended up deducting a portion of it but removed the sound and lightshow. She did use it for medical reasons; she had arthritis and had a note from her doctor."
It was going to be a bit longer swim for one New Jersey accountant's client.
"A taxpayer wanted to write off a $100,000 swimming pool for medical reasons," says the accountant. "Swimming, he explained quite seriously, relaxed him so he could earn more money, which in turn would be taxable."
Uh ... no.
5. Beautify your return
Ah, nature! So peaceful, so inspiring, so ... deductible?It can be, at least according to Allyson Baumeister, CPA at Sanford, Baumeister & Frazier in Forth Worth.
"I had a lady client who didn't like some of her really mature trees, they didn't fit into her new landscaping theme," she says. "So, she dug them out and donated them to charity."
"She had to get somebody to appraise the value of the trees, but the IRS allowed it," says Baumeister.
6. Unmarried, filing weirdly
Common-law marriages can create tax complications, as Hatter found out when two young, single clients who had been living together for a number of years decided to file jointly as a married couple."You can do that in Texas by meeting certain criteria, living together for so long," Hatter says. "The problem is, when you decide that you don't want to live together anymore, it creates all sorts of problems with the IRS."
That's because once a couple files jointly, everything thereafter is keyed off of the male partner's Social Security number.
"You don't have to go through a divorce per se; it just takes a little letter-writing campaign to the IRS to get it fixed," Hatter says.
7. Dancing with the IRS
Who doesn't get a little carried away with the grace and fluidity of ballroom dancing? But according to a Tucson, Ariz., CPA, some dance moves fail to charm the taxman.