Police k-9 unit handler 'home office' deductions

[mastertaxguy]

Question for group:
1. How are you treating public police K-9 unit handlers claims for "home office deduction" or employee business expenses? The officer(s) claim they have to keep the animal with them when off duty.
a. What kind of things do you require in the way of substantiation?
2. Does it matter, to you/your practice, if there is a written provision of a collective bargaining agreement?
3. Does it matter if, in the absence of a CBA provision, the officer has a letter from the Chief of Police, shift commander or equivalent on Department of municipality letterhead that the officer must 'kennel' the dog at the officer's residence during off duty time so as to have the animal available 24 hours a day?
4. Would it matter if the officer treats the dog as a family pet while at their residence?
4a: would if matter, for purposes of deductions of any type, if the officer was featured in a local newspaper article stating "at home, [name of dog] is treated like a member of the family?
5. In your practice or actual knowledge is there a "fixed boarding amount" like $29/a day for these situations?
6. Is there a practical or functional difference between a requirement to keep your department issued service weapon(s) and a department issues canine?
7. If you take deductions for the canine in home, do you take show them on Schedule A, "2106" misc. deductions, OR do you treat them as a 'charitable' donation of good to the municipality?
8. If you are taking deductions like that for police officer k-9 handlers in your practice, what "tax" authority do you rely on?

Background: taxpayer claimed that "some cop out in Jackson, MI claimed $29/day and he was audited it was allowed. and I want YOU (meaning us) to do the same." And no, there is no department letter or CBA covering this, and it isn't clear if the officer is being reimbursed or otherwise provided with dog food; however, all vet bills and grooming are paid for by the municipality. For this post, municipality refers to any governmental agency fed, state, local, whatever.

[Burke]

I don't have any, but I will give you my 2 cents worth. No to all the above. If he pays to board the dog elsewhere, I might consider that. Does he deduct the cost of his weapon, or is it provided by the police dept? Did they provide the dog and its training at any cost to him? And if it were to be deducted, I would require substantiation from his employer as to requirements.

[taxmom34]

i would think this deduction for out of pocket expenses would go on schedule A along with other job related such as uniforms, gun, etc. On the other hand if he were self employed working as security it would go on schedule C.

[FEDUKE404]

Employee business expense, perhaps

One would think that if these were legitimate business expenses the employer would reimburse 1:1 via expense account OR provide a "doggie clothing allowance" in the officer's pay.

If not, I agree this would fall into a Form 2106 expense with the usual Schedule A limitations.

BTW: How do you depreciate an office-in-doghouse ?

FE

[JohnH]

I'd likely tell the client that it appears he's going to need to go to Jackson MI to get his return prepared. If there's a preparer there who has made this deduction stick, then that's who he needs to use.

[TAXNJ]

.....

BTW: How do you depreciate an office-in-doghouse ?

FE

Easily. Some professionals consider their owned business office building to be "in the dog house" and therefore depreciate it. Those that do not usually "BARK" about it!

[Burke]

Where I take issue is with the "fixed boarding amount" of $29 per day. Where did that come from? That is $10,585 per year, which he is not really paying to anyone. It would be a big stretch..... Is he allocating part of his house as attributable to the dog for depreciation purposes? It would not likely come close to that figure.

[mastertaxguy]

Tax court case on dog house

One would think that if these were legitimate business expenses the employer would reimburse 1:1 via expense account OR provide a "doggie clothing allowance" in the officer's pay.

If not, I agree this would fall into a Form 2106 expense with the usual Schedule A limitations.

BTW: How do you depreciate an office-in-doghouse ?

FE

Thanks for your input.

There is that tax court case allowing deprecation deduction for the dog house constructed for the use of the police dog (K-9) housed by the taxpayer/police officer. (David and Tang Le, Sum 2009-109; see Pp. 15).
The argument was the kennel the TP built was NOT a 1250 building and thus depreciable property subject to Sec. 179 treatment.

The scenario our office is dealing with does involve a "kennel" type structure, but the TP also has other dogs as pets. TP & associates (3) wants to deduct a per diem kennel fee basically. We don't want to lose the client or his fellow officers.

[mastertaxguy]

Kenneling fees

Where I take issue is with the "fixed boarding amount" of $29 per day. Where did that come from? That is $10,585 per year, which he is not really paying to anyone. It would be a big stretch..... Is he allocating part of his house as attributable to the dog for depreciation purposes?

Basically the TP based that on local kenneling charges in the vicinity of his home. We were (and still are) waiting for some written confirmation of this being an unreimbursed employee expense (and also to resolve an issue with Kiwanis & other serivce club donations). We don't like buying audits for ourselves, but we don't like losing clients either

[Burke]

See my post above which crossed with yours. Cost of outside doghouse? Maybe, if it was just for the police dog, not the others. No to the per diem "rate." Sometimes we just have to face down clients as to what they "want," based on facts.

[JohnH]

We don't like buying audits for ourselves, but we don't like losing clients either

Sometimes those two objectives are mutually exclusive.