When you’re a news anchor, you have to ooze professionalism. But it’s not enough to own many leather-bound books and an apartment that smells of rich mahogany, you also have to look the part.
According to the Women’s Wardrobe Guidelines, female anchors should sport “standard business wear, typical of that which one might wear on any business day in a normal office,” like the fetching ensemble seen above on Miss Corningstone.
In Hamper v. Commissioner, T.C. Summary Opinion 2011-17 (2011), one female anchor felt the cost of such professionalism should provide a rather hearty tax benefit. The taxpayer deducted the cost of her “work” clothing – which included business suits, lounge wear, a robe, sportswear, lingerie, cotton thong underwear*, and evening wear — as unreimbursed employee expenses. The Tax Court, as you might imagine, had a different view.
Relevant Law: While Section 162(a) allows a deduction for ordinary and necessary expenses of carrying on a business, Section 262 expressly denies a deduction for “personal, living, or family expenses.”
Courtesy of decades-old case law, the rules for determining whether the cost of clothing is deductible as an ordinary and necessary business expense are well established. If the answer to all three questions below is “yes,” you’ve got yourself a deduction.
1. Is the clothing required or essential in the taxpayer’s employment?
2. Is the clothing not suitable for general or personal wear?
3. Is the clothing not worn for general or personal wear?
Court’s Decision: The Tax Court, citing previous case law, held that while the clothing may be required as part of the taxpayer’s employment, it was also plenty suitable for everyday personal wear. Just because a news anchor chooses not to wear their on-air attire outside of work does not mean it isn’t appropriate for those purposes. After all, even the ever-professional Papa Burgundy liked to kick back on the weekends and lose the suit in favor of something a little more comfortable.
Since the business clothes could be worn for everyday use, even though they apparently were not, they failed to satisfy the three-part test, and represented non-deductible personal expenses.
*note to self: in light of court’s decision, reconsider planned deduction for celebratory “April 15th” thong