One of the things I love about the work I do is I am always learning new things and finding new opportunities.  Frequently when reviewing tax reduction strategies with a pet owner, I hear “can I deduct the dog/cat/bird/fish/etc.”  And the answer is: sure, if you can arrange to get a social security number for him/her and qualify them as a dependent through the relationship and member of household tests.

The answer, of course, is usually “no.”  But as with all tax questions, the real answer is “it depends.” In the case of the disappearing cat (or fictitious child), when IRS first started requiring social security numbers for dependents in 1987, there were 7-million fewer dependents claimed on tax returns than the previous year (Snopes.com).

However, I had an interesting question from a new client several years ago.  This particular client provides a foster home for cats for a non-profit animal rescue shelter.  The client asked if the costs of food, care, grooming, and veterinary care for the fostered cats would qualify as a charitable deduction.  Sure enough, there is a court case where the score was Taxpayer: $12,068, IRS: $0 in this exact situation.  Jan Van Dusen was initially denied her charitable tax deduction for taking care of some 70 stray cats on her 2004 return, but took the case all the way to  U.S. Tax Court in 2009 after the IRS wouldn’t budge on their decision (https://casetext.com/case/dusen-v-commr-of-internal-revenue).  A related Wall Street Journal article and the court case do make it clear, however: document, document, document your deductible expenses (see “Can You Afford to Lose $25,000?” and “Splitting Hairs, Volume #2,379“).

Now, in fairness to accurate reporting, Ms. Van Dusen also was subsequently found guilty of animal cruelty for failing to properly care for the cats.  However, that was brought about by a local law enforcement agency, completely unrelated to the IRS Tax Court case. So, yes, Virginia, it is possible that you CAN deduct the cat.  If you have the right situation, at the right time, with the right documentation.  And that, dear reader, is what ProActive tax planning is all about!