Unfortunately, not everything you spend your money on gives rise to a tax deduction. Most of your personal expenses, such as food, clothing, and recreation, are nondeductible items. The tax law also specifically bans certain write‐offs. Of course, in some cases, while a deduction may be banned as a general rule, there may be circumstances under which it becomes deductible (so check throughout the book for exceptions to the general rule).

The IRS has identified a number of scams (the IRS calls them the “Dirty Dozen”) in which sharp promoters incorrectly advise taxpayers to claim certain types of write‐offs. Here are some types of situations that the IRS has over the years cautioned taxpayers against:

• Pandemic‐related scams. They included Economic Impact Payment thefts where scammers tried through text messages, phone calls, or email to obtain bank account information.
• Phishing. Scammers purporting to be from the IRS send e‐mails seeking to obtain personal information used for identity theft. Spear phishing is a more sophisticated version aimed at tax professionals. The IRS never contacts taxpayers by e‐mail without prior notice of the communication; the IRS already has taxpayers' personal information.
• Pervasive telephone scams. Callers pretend to be from the IRS in order to steal money or identities (“vishing”). If you know you don't owe money (i.e., you never received a bill from the IRS), don't respond. Instead, call the Treasury Inspector General for Tax Administration at 800‐366‐4484 to report the call.
• Identity theft. This has topped the list of scams in the past several years, despite considerable IRS efforts to thwart it where taxes are concerned. Thieves are looking for ways to use a legitimate taxpayer's identity and personal information to file a tax return and claim a fraudulent refund. Avoid problems with obtaining your legitimate refund by safeguarding your tax information; contact the IRS Identity Protection Specialized Unit.
• Preparer return fraud. Dishonest tax return preparers, often promising refunds too good to be true, can leave taxpayers owing taxes and penalties for underpayments. Or they may have client refunds directed to themselves, leaving clients with difficulty obtaining what they are owed. Taxpayers remain liable for taxes owed on their returns.
• Fake charities. Scam groups masquerading as charitable organizations may lure people into making donations. These donations aren't tax deductible. Check the IRS's online list of approved organizations at https://apps.irs.gov/app/eos/ before making a donation.
• Inflated refund claims. Scam preparers induce taxpayers (usually those with low income or poor English skills) to claim inflated or erroneous write offs (e.g., false claims for education credits or the earned income tax credit), often based on fake Social Security benefits. They may use phony W‐2s and 1099s to create the illusion of income. Only use a reputable return preparer, as explained earlier.
• Inflated deductions. Some may pad deductions, such as charitable contributions and business expenses to which they are not entitled. Only claim deductions to which you are entitled. If you pad deductions, you may be subject to significant penalties and even criminal prosecution.
• Frivolous tax arguments. Some promoters encourage taxpayers to make unreasonable and outlandish legal claims to avoid paying their taxes. These arguments don't hold up. Don't be talked into using a frivolous argument. Read the truth about frivolous tax arguments from the IRS at www.irs.gov/privacy-disclosure/the-truth-about-frivolous-tax-arguments-introduction.
• Hiding income offshore. The IRS is working with some offshore banks to learn the identity of depositors who fail to report their offshore income on their U.S. returns. The IRS continues to develop investigation procedures to catch nonreporters.
• Filing false documents to hide income. This usually involves inflating earned income to maximize the earned income tax credit to which a taxpayer is not eligible (or at least not in the amount claimed). Taxpayers can be subject to penalties, interest, and even criminal prosecution.
• Excessive claims for business tax credits. Scammers induce taxpayers to claim credits that are meant for fuel used in off‐highway vehicles (e.g., farm equipment) or the research credit designed for increasing research activities. Taxpayers who agree to submit these claims may be liable to penalties of $5,000 for frivolous arguments as well as criminal prosecution.
• Abusive tax shelters, trusts, and conservation easements. These are investment schemes, which are listed or reportable transactions requiring taxpayers to disclose them on their returns; the schemes promise write‐offs greater than amounts invested. These schemes can result in both civil and criminal penalties.
• Trust deductions for personal expenses. Promoters tell taxpayers to transfer their assets to trusts and have the trusts deduct the cost of food, clothing, and other personal expenses. Personal expenses, other than those explained throughout the book, are not deductible.
• “Abuse of charitable deductions.”  These abuses include attempts by donors to maintain control over donated assets or income from donated property. They also include schemes involving the donation of noncash assets, including easements on property, closely held corporate stock, real property, and overvaluations of property donations. No deductions are allowed for illusory donations, and there are penalties for significant overvaluations.
• “No gain realized” deduction. Like the claim of right doctrine, promoters tell taxpayers to claim a miscellaneous itemized deduction on Schedule A equal to their adjusted gross income. There is no such deduction.
• Zero returns. Promoters instruct taxpayers to enter all zeros on the return (rather than reporting their actual income items).  Income must be reported unless there is a specific tax rule for exemption or exclusion.
• Slavery reparations. Promoters suggest that African Americans can claim a deduction or credit for reparations. There are no such reparations and no such allowable deduction or credit.
• Home‐based businesses. While there is a deduction allowed for legitimate home‐based businesses, promoters tell taxpayers to fictitiously create a business run from home so that a deduction will be allowed.  Fake businesses do not support real deductions.
• Shared earned income credits. Promoters tell taxpayers that they can “share” dependents in order for multiple taxpayers to claim the earned income credit with respect to the same dependents. Only eligible taxpayers can claim the earned income credit and only one credit is allowed for each dependent.
• Offer‐in‐compromise mills. Companies make outlandish claims, usually in local advertising, about how they can settle a person's tax debt for pennies on the dollar if they pay a fee. They pay the fee whether or not eligible for relief. Individuals can obtain the same results on their own, if eligible, by working with the IRS.

C Nondeductible Items

Here is a listing of other items you may not deduct:

• Additional Medicare taxes on earned income and net investment income for high‐income taxpayers
• Alimony payments under divorces or agreements executed after 2018
• Attorney's fees on buying a home
• Bank fees, such as monthly checking fees on a personal account
• Bar examination fees
• Blood donations
• Bribes
• Burial fees
• Car expenses for personal use of the car
• Child support payments
• Club dues for recreational, social, and athletic clubs
• Commuting expenses
• Compensation to housekeepers and other domestic employees
• Cosmetic surgery not medically needed
• Country club membership
• Credit card interest incurred for personal expenditures
• Debts belonging to another person that you pay
• Demolition costs
• Disability insurance premiums
• Education costs for your child's primary and secondary school
• Elective deferrals to 401(k) and similar plans
• Employee business expenses (through 2025)
• Entertainment costs
• Estimated tax penalties
• Expenses of earning tax‐exempt income
• Federal income tax
• Fifty percent of meal costs for business (unless provided by a restaurant in 2022)
• Fines
• Funeral expenses
• Gambling losses in excess of winnings
• Gift tax
• Gifts you make to family and friends
• Health spa expenses
• Hobby losses
• Interest on loans to buy or carry tax‐exempt securities
• Investment advisory fees (through 2025)
• Investment seminars
• IRA contributions by participants with AGI over set limits
• Job‐related expenses
• Kickbacks
• Life insurance premiums
• Lobbying expenses (other than in‐house expenses up to $2,000)
• Losses from the sale of your home, furniture, car, and other personal items
• Losses in excess of at‐risk limits
• Losses on sales to related parties
• Lost or misplaced cash or property
• Lunches with coworkers
• Moving expenses
• Organ donations (e.g., a kidney)
• Over‐the‐counter medications for purposes of the itemized deduction (unless purchased with a prescription)
• Partially worthless securities
• Passive activity losses in excess of passive activity income
• Penalties
• Personal disability insurance premiums
• Personal interest (such as credit card interest)
• Personal living expenses (such as food, clothing, rent, and utilities)
• Pet food (other than for Seeing Eye or therapy dogs, which may be a deductible medical expense)
• Points paid to refinance a home mortgage
• Political contributions
• Professional accreditation fees
• Property settlements when dissolving a marriage
• Reimbursed expenses you receive under an accountable plan
• Repairs to your home or personal car
• Repayment of loans
• Rollover contributions
• Roth IRA contributions
• Sales tax if you deduct state and local income taxes
• Social Security and Medicare (FICA) taxes
• Spousal travel costs
• State inheritance taxes
• Stockholder meetings, expenses of attending
• Tax penalties
• Tax return preparation costs
• Telephone line (basic service charges of first residential line to home)
• Title insurance
• Toiletries
• Travel as a form of education
• Uniforms
• Union dues
• Vacations
• Veterinary fees
• Voluntary alimony payments
• Voluntary unemployment benefit fund contributions
• Wash sale losses