Irwin had written five novels - all unpublished. Another work of fiction attracted the Internal Revenue Service - his tax return.

For three years the electronic training instructor had deducted family expenses totaling $89,465. This included his television set and washing machine, expenses of the family's three cars and transportation from his home in Lodi, Calif., to his mother's funeral in Michigan.

In Tax Court, the writer suggested a novel argument: Fiction writers can deduct personal expenses because personal experiences and observations are business experiences and observations; you can't separate the two. Consider the razor in Irwin's hand each morning. Its heft and balance. The inherent danger in gliding it across his exposed neck. The soft feel of skin after the shave. All might be used in his next novel, making his razor and shaving cream deductible expenses. The writer concluded saying he hadn't deducted food, clothing and amusements - "out of choice."

The judge rejected Irwin's argument without comment; to say anything might suggest it has some merit.

An expense must meet three tests to qualify as a business deduction: (1) It must have been incurred primarily to benefit the business. (2) It must have a direct, not remote or incidental, connection to the taxpayer's business. (3) It must not be "inherently personal," like a saleslady's dress or an accountant's eyeglasses.

In this case, the judge edited out the personal expenses and wrote a new ending for Irwin's returns that included additional taxes and penalties. (more at Other Deductions)

THE MORAL: Truth may be stranger than fiction but it is not always deductible.

Released 12-24-01