If you foster or rescue animals, your expenses for things like cat food, paper towels and veterinary bills may be tax-deductible, thanks to a June, 2011 ruling by a U.S. Tax Court judge. Whether your animal rescue and foster expenses are tax-deductible will depend on several factors.
Donations to Charities
Donations of money and property to IRS-recognized 501(c)(3) charities are generally deductible, provided that you maintain proper records and itemize your deductions. If your rescue and fostering work furthers the mission of the 501(c)(3) group that you are working with, your unreimbursed expenses are a tax-deductible donation to that charity.
Is it a 501(c)(3) Charity?
A 501(c)(3) charity is one which has been given tax-exempt status by the IRS. These organizations have an ID number assigned by the IRS, and often give that number to their volunteers who buy supplies so that they do not have to pay sales tax on those supplies. If you are working with a 501(c)(3) shelter, rescue or foster group, your unreimbursed expenses for the group are tax-deductible.
If, however, you are rescuing cats and dogs on your own, without an affiliation with a 501(c)(3) organization, your expenses are not tax-deductible. This is a good reason to either start your own group and get tax-exempt status, or join forces with a group that already has it.
Keep in mind that only donations of money and property can be deducted. If you donate your time as a volunteer, you cannot deduct the value of your time from your taxes.
Do you Itemize Your Deductions?
If you itemize your deductions, you can list and deduct charitable contributions, including your expenses from animal rescue and foster work with a 501(c)(3) group. In general, you should itemize your deductions if those deductions exceed your standard deduction, or if you are ineligible for the standard deduction.
Do You Have Records?
You should keep all of your receipts, canceled checks or other records that document your donations and purchses for the charity. If you donate property, like a car or a computer, you can deduct the fair market value of that property, so it is important to have documentation of the value of the property. If any of your donations or purchases are greater than $250, you must get a letter from the charity by the time you file your tax return, stating the amount of your donation and the value of any goods or services you may have received in exchange for that donation.
Van Dusen v. Commissioner of the IRS
Animal fosterers and rescue volunteers can thank Jan Van Dusen, an Oakland, CA family law attorney and cat rescuer, for battling the IRS in court for the right to deduct animal rescue expenses. Van Dusen had claimed a $12,068 deduction on her 2004 tax return for the expenses she incurred while fostering over 70 cats for the 501(c)(3) group Fix Our Ferals. The group's mission is to:
provide free spay/neuter clinics for un-owned and feral cats in San Francisco East Bay communities, in order:
- to greatly reduce the number of these cats and mitigate their suffering from starvation and disease,
- to create an economically feasible way for communities to humanely reduce the population of stray cats, thus easing neighborhood tensions and fostering compassion, and
- to relieve local animal control facilities of the financial and psychological burden of euthanizing healthy but homeless cats.
The court's decision documents Van Dusen's devotion to the cats and to FOF:
Van Dusen devoted essentially her entire life outside of work to caring for the cats. Each day she fed, cleaned, and looked after the cats. She laundered the cats’ bedding and sanitized the floors, household surfaces, and cages. Van Dusen even purchased a house “with the idea of fostering in mind”. Her house was so extensively used for cat care that she never had guests over for dinner.
Although Van Dusen had had little experience with tax law, she represented herself in court against the IRS, which Van Dusen says tried to portray her as a "crazy cat lady." The IRS also argued that she was not affiliated with FOF. While the majority of her 70 - 80 foster cats came from FOF, Van Dusen also took in cats from other 501(c)(3) organizations. Judge Richard Morrison disagreed with the IRS, and held that "taking care of foster cats was a service performed for Fix Our Ferals." Her expenses were deductible, including 50% of her cleaning supplies and utility bills. While the court found that Van Dusen lacked proper records for some of her deductions, she nevertheless won the right for animal rescue and foster volunteers for a 501(c)(3) group to deduct their expenses. The IRS has 90 days to appeal the court's decision.
Van Dusen told the Wall Street Journal, "If it came down to helping a cat with a medical problem or saving for retirement, I would spend on the cat's care—as will a lot of rescue workers."
H/T to Rachel Castelino.
The information on this website is not legal advice and is not a substitute for legal advice. For legal advice, please consult an attorney.
Doris Lin, Esq. is an animal rights attorney and Director of Legal Affairs for the Animal Protection League of NJ.