A Taxing Tail

Ha, and I bet you never thought you'd see tax tips here!Many of you have already heard the story about the human who beat the IRS and was able to claim most of her expenses for rescuing and taking care of stray and feral cats for a rescue organization. This was a huge win for the rescue community, and validates all the hard work that so many of you do to help kitties in need. But my human, who is a stickler for details, wants me to make sure everyone knows what they can and cannot do, so that next year at tax time, you rescuers have everything that you need. (And Angel and Isabella’s human, if you want to chime in on this, please do! You work in this field an my human doesn’t.)

The basic story goes like this: back in 2004, a family lawyer and cat rescuer named Jan Van Dusen claimed a $12,068 deduction on her tax return for expenses incurred while fostering cats for a group called Fix Our Ferals. The IRS denied her deduction and claimed this was a personal expense, not a charitable one. But Van Dusen fought them, and in the end, won most — but not all — the deductions. I’ll itemize briefly so you can see what she did and did not do right.

  • Van Dusen volunteered for a qualifying 501(c)3 charity. In fact she volunteered for several. How do you know if the group you volunteer for qualifies? Usually, they advertise this fact far and wide, announcing it on their website, Facebook page, and anywhere else they can. In addition they will have an ID number. You can also ask them.

  • She kept some, but not all records. The Tax Court was able to look at Van Dusen’s credit card statements, veterinary records, checkbook register and other papers to itemize her expenses. It would have been even better if she had kept actual receipts and taken notes. Whenever my human has a deductible expense, she takes the receipt and writes the purpose for the expense on it. Or at least she tries to do that as often as she can remember!

  • She did not get a letter from the rescue for expenses that were over $250, and this cost her! If you are spending a lot of money for any reason — like if a foster cat gets sick or you are taking care of a bunch of cats and are dropping a big wad of cash at the pet store or Costco — you need to get a letter from the charity acknowledging that this expense was for their benefit. Ideally you should get the letter right away, but in any case, you should have it before you file your tax return for that year.

  • She was denied expenses that she could not prove were solely for the rescue cats benefit. These were things like Costco membership, a wet/dry vac, bar association dues and the like. Do any of these things look like they would directly go to help rescue cats, or is it more likely to help them indirectly, while helping yourself too? As a cat, I see this as a matter of common sense. Deduct items that help cats only. If it’s a gray area, or if it is clearly benefitting you as much as it is them, then don’t try to claim it as a deduction.

I hope this is helpful to you rescue humans out there! I want to see you save money at tax time so you are able to help more kitties! Now I have a surprise for you: comment below and tell me about your favorite small cat rescue — not a Humane Society or one of the big groups that throws huge donation events and has dozens of volunteers and a dedicated staff. I’m talking about a small rescue that only has a few people helping kitties, but has still managed to get their 501(c)3 status. My human will count up the ones mentioned in the comments up until 11:59 PM Pacific Time on the date of this post, June 14, and randomly pick one for a donation of $20. I told her that is what I am charging to write about taxes instead of something fun, like catching moths or watching Bird TV.

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Having problems with your human or the other cats in your house? As the internet’s “Dear Abby With Claws,” Sparkle had answers to many annoying problems in her two award-winning books! Visit her author’s page on Amazon to buy one or both of her awesome Dear Sparkle books!
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Comments

  1. says

    Mom said this is really good information, but I just want to know what did you charge your mommy ? ; )
    Have a wonderful day Sparkle !!
    xoxo

  2. says

    I’m really fond of PurrEver Ranch Sanctuary (www.gotcats.org). The woman who runs the place rescues elderly and disabled cats from shelters where they would be killed, and gives them a happy and safe home for the rest of their lives. She’s also been known to take in litters of stray kittens when needed. And every $20 is a huge help for her!

  3. says

    We briefly heard about this woman, and are happy for her victory. Thanks for all the great information. Mom said it’s good information for taxes in general and that you are very impressively smart, Sparkle.

  4. says

    That is so exciting that that woman won her deal with the IRS. I hope that helps a whole bunch more people, then more people would be more inclined to help these shelters. One of our favorite shelters is http://alleycatsandangels.org and that is because they really help feral cats which we love. Great subject Sparkle.

  5. says

    Sparkle, you don’t think taxes are fun? :) This is really good information and you and your human did a great job putting it all together. A place to check to see if an organization qualifies as a non-profit is http://www.guidestar.org which lists the organization plus allows people to see their Form 990 which is their tax return. This tells how the donations are spent. Your humans tips about receipts is really good. It could also be helpful for people who do a lot of work for rescues to keep one of those little datebooks with them to jot down miles driven on a particular day for what reason, etc. This wil help support the receipts too since it shows when and where they went. And you are very right that anything that could be construed as personal use should not be deducted since it’s a red flag no one needs.

    • says

      Thanks for the info about GuideStar! Regarding the tax deductible mileage: at some point, back in the late 1980s when my human was a fledgling rock journalist, she created a mileage form for herself to record business and volunteer mileage, containing the odometer readings of beginning mileage, end mileage, total miles driven, where she drove to, and the purpose. She has been using it ever since!

  6. says

    Very good information, Miss Sparkle! The shelter our mom donates to always sends her a letter and a receipt for even the smallest of donations! And they’ve got some new software to help them get even better at this! We would love to have our shelter (where Zoe was adopted) entered into your drawing. It’s the Animal Rescue Foundation of Bartlesville (http://www.arfok.org). They have about 5 or 6 ladies who spend every day up there, taking care of the cats and finding foster homes for any dogs that need it (they don’t have a facility yet that can house dogs). Thank you for doing this!

  7. says

    I’m sure you read my blog about A Call 4 Paws in Jersey City. As far as I know, it’s run by one woman, with help from her son. They feed and rescue, spay/neuter and seek medical attention for strays, who are then put in foster homes or sent to their cat sanctuary. They rely solely on donations and tricky trays and jazz fundraisers. http://www.acall4paws.com/

  8. says

    We are delighted that lady won the case – no-one tells you what you can claim they leave it up to you to find out for yourselves but they are very quick to take off what you owe them!
    Luv Hannah and Lucy xx xx

  9. Carol says

    Great information! My favorite cat rescue is Winging Cat Rescue. WCR is a small group of very dedicated cat lovers who help save cats from the high-kill shelters in Georgia. They spring the cats, and get them vaxed and spayed/neutered. In addition to helping individual cats, they sponsor S/N coupons for people adopting cats from the shelters they help, and also sponsor low-cost S/N clinics on a monthly basis to help stop the flood of new kittens who will only end up in the shelters or worse. Their website is http://www.wingingcatrescue.org/ (I love WCR, but all the groups mentioned are wonderful!)

  10. says

    My favorite shelter is http://www.duncansplace.org/. That’s where EK and Candy came from. They not only foster kitties, but help people to keep their pets that might otherwise have to give them up due to financial hardship. They sponsor spay-neuter clinics, help with TNR programs, distribute donated food to people who care for feral colonies, and all kinds of other things.

  11. Christina says

    This is great news!

    My favorite rescue is Holly’s Place Animal Rescue. http://hollys.org/

    Holly’s Place does so much for animals. Not just adoptions, but TNR, community outreach, education, spay/neuter assistance, etc. Holly’s Place is an amazing rescue.

  12. says

    My favorite cat rescue is Winging Cat Rescue. They pull cats from the gassing pound in Spaulding County, GA and surrounding area gassing shelters. They post kitties on Facebook and their website and raise funds to get them pulled and to safety, vetting and spay/neuter vouchers. The cats are then fostered, sent to rescues or adopted with the long term goal forever homes. Winging Cat rescue has saved thousands of cats from the gassing shelters of central Georgia.

  13. says

    What a great informative post, Sparkle! Sometimes humans need that kind of help to help kids less fortunate than us. And how nice of your mom, too!

  14. Laura, Taffy, and (angels) Jet and Venus says

    Thank you, Sparkle! Our favorite rescue is The Noah Project in Muskegon, Michigan. The Noah Project is a small no-kill facility dedicated to the rescue of abandoned and abused animals.

  15. De V says

    Habitat for Cats is a feral rescue group that helps colony caretakers trap neuter and release their ferals in Rochester, New York.If kittens are caught or young friendly cats, they try to get them into foster homes. But they are VERY short on foster homes. I wish I could get my home rebuilt to be able to take in my ferals in one area and foster others in another. One of Habitats members has a beautiful 3 floor deck on the back of her place. Its gorgeous and her fosters love it.She has MANY and is very dedicataed to their cause and I’m VERY grateful to her and her help.They have a TNR clinic that costs $35 per cat so some caretakers can’t get all their guys done. If HFC has extra donations for TNR spots then they do more. They have a website if there is anyone wishing to try and help.Money, time, or homes.For fostering or forever homes. Could use help with the business end of the group too. Look it up and send them a mail.

  16. God's little Blessings Rescue, AnaLuisa Robinson says

    My husband is active army and we have been rescuing animals for close to 11 yrs. We have no idea how to get a 501 c3 but we have a dba and i praise God you were able to get your funds back to help more. We spend almost 5000 in vet fees two years ago and about close to 1000 already. we are small it is just me and mom we have a told of 30 babies but you have give me hope. Please tell me what i can do to help more or our feral babies. thank you kindly and praise God for your win.

  17. Cathie Fieser says

    I have a really important footnote to add to your excellent information. The IRS has 90 days from the date of the decision to file an appeal. Its almost 100% certain that the WILL appeal. Once they do, everything will still be challenged until it reaches a final decision (the Supreme Court). Unfortunately, this means that all rescuers might want to wait for the outcome before taking these deductions. To do so now will trigger at the very least an audit and at the most holding up your return and refund for years.

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