Possible Tax Benefits for Animal Fostering

First the Disclaimer: We are not tax pros or accountants... this is informational use only! All tax issues and deductions should be discussed with a tax professional!

The IRS and accountants historically roll their eyes at the idea of deducting volunteer expenses. A woman named Jan Elizabeth Van Dusen sued the Commissioner of the IRS over “unreimbursed volunteer expenses while caring for foster cats in her private residence.” These expenses primarily included “payments for veterinary services, pet supplies, cleaning supplies and household.” Apparently the IRS nailed her for a $12,068 charitable-contribution that she made on her taxes, but she fought back and largely won. “Largely,” because the court allowed that she could take most of the deduction, minus some expenses that were hard to link solely to pet care. The decision, in Van Dusen v. Commissioner, paves the way for volunteers of animal-rescue groups to deduct properly documented unreimbursed expenses that further the groups' missions, such as fostering animals.

While volunteers cannot deduct the value of the services they provide, deductions are available when a taxpayer:

  • Donates money or property directly to the charitable organization
  • Places money or property in trust for the charitable organization
  • Incurs unreimbursed expenses while performing volunteer services for a charitable organization

The Van Dusen case centered on whether Ms. Van Dusen’s deductions were permissible under the third type of deduction – expenses incurred incident to the performance of services on behalf of a charitable organization. The question was whether Ms. Van Dusen was properly deducting her unreimbursed expenses.

HOWEVER There are rules and strict IRS rules on record keeping that must be complied with to take the deduction. For example the charity must be an established 501c, and specific accurate records must be maintained. The judge did disallow some of Ms Van Dusen's expenses because they were either not properly documented or could not be specifically tied to her Charitable work. Cunsult your tax specialist and if you are not currently maintaining records get organized for next year!

Read more:
Charity Lawyer Blog
Wall Street Journal
Dallas Tax Professional Blog

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