Tax Court Rules on Cat Lady’s Case

Jan Van Dusen, a family attorney from Oakland, California, spends most of her time caring for seventy to eighty feral cats at her home. Van Dusen attempted to deduct her cat care expenses as a charitable deduction on her 2004 tax return. The IRS denied the deduction, claiming Van Dudsen’s expenses were not deductible because they did not go to a qualified charity.

The Tax Court held that Van Dusen could claim much of her initial $12,068 charitable deduction claim. The court stated that these unreimbursed volunteer costs were deductible to the extent Van Dusen could properly substantiate them and prove they were incidental to charitable work.

The court found that Van Dusen did work for five different cat charities, and that that ninety percent of Van Dusen’s veterinary and pet supplies, along with fifty percent of her cleaning and utility costs attributed to Van Dusen’s care, making these costs potentially deductible. As for substantiation, the court divided Van Dusen’s costs into amounts over $250 and amounts under $250. For the costs under $250, the court allowed Van Dusen to substantiate through credit card statements, veterinary account history, invoices, bank statements, and carbon copies of checks. The court denied Van Dusen’s deductions for the expenses over $250 because she did not have an acknowledgement letter from a charity.

“It’s a huge win for all the rescue people out there,” Van Dusen said. “The judge was really nice. He understands what we do. We all go broke doing this.”

Ashlea Ebeling, Cat Lady Goes to Tax Court, Forbes, Jun. 6, 2011.