10 Unbelievably Wacky Federal Tax Laws

Photo: iStockphoto

Type Size:

By STACEY CLOSSER, The Fiscal Times

January 25, 2013

The basic questions that get brought up in Tax Court seem straightforward enough: What is income and what are its related expenses? The specifics can get, well, flat-out weird.

The IRS code may be full of loopholes and deductions as it is, but the IRS has also approved more than a few imaginative – even wacky – tax breaks.

Click Here for 10 Unbelievably Wacky Federal Tax Laws and See if You Qualify for Any of These Breaks

If you have a huge deduction that you’d like to take but are unsure if it will pass muster with the IRS, talk to your tax preparer to see if a private letter ruling (PLR) makes sense, advises Gil Charney, principal tax researcher at the Tax Institute at H&R Block in Kansas City, Missouri. The PLR is written guidance from the IRS that provides an advanced decision on how it would treat the case. It does cost money, so make sure the deduction is worth it.

Americans are known to bristle come April 15, but nearly 240 years after the founders threw a Boston Tea Party to protest unfair taxes, citizens are using less dramatic – but no less creative – ways to test the tax code. Modern-day challenges often end in U.S. Tax Court, where citizens can go to take on the Internal Revenue Service.The basic questions that get brought up in Tax Court seem straightforward enough: What is income and what are its related expenses? The specifics can get, well, flat-out weird. The IRS code may be full of loopholes and deductions as it is, but the IRS has also approved more than a few imaginative – even wacky – tax breaks. Click Here for 10 Unbelievably Wacky Federal Tax Laws and See if You Qualify for Any of These Breaks If you have a huge deduction that you’d like to take but are unsure if it will pass muster with the IRS, talk to your tax preparer to see if a private letter ruling (PLR) makes sense, advises Gil Charney, principal tax researcher at the Tax Institute at H&R Block in Kansas City, Missouri. The PLR is written guidance from the IRS that provides an advanced decision on how it would treat the case. It does cost money, so make sure the deduction is worth it.