Tax court says no deduction for prostitutes and porn

It seems William G. Halby of Brooklyn New York has lost his battle in the US Tax Court for about $47,000 which he spent on prostitutes and porn and then deducted as a medical expense on his 2005 federal tax return. They also denied his deduction of $76,000 for the same "medical services" from 2004. It should be noted that Mr. Halby also lost a case with the New York State Division of Tax over deductions totaling $322,000 that he claimed on New York tax returns from 2001 to 2005.

To his credit, Mr. Halby did get a detailed journal with the dates, "service provider" name and amount paid for every visit he made to a prostitute. Unfortunately for Mr. Halby, the tax court judge held that all the expenses were personal in nature and did not qualify as medical services, nor did the expenditures for books and magazines on pornography and sex therapy.

Mr. Halby has indicated he intends to appeal the ruling on the grounds that the judge did not consider his argument that the New York law outlawing prostitution violates the constitutional right to privacy.

You can read more at WebCPA and Jr. Deputy Accountant.