P incurred unreimbursed volunteer expenses while caring for foster cats in her private residence. P’s expenses consisted primarily of payments for veterinary services, pet supplies, cleaning supplies, and household utilities. P claimed a $12,068 charitable contribution deduction for the expenses on her 2004 tax return. R issued a notice of deficiency denying the deduction. R claims that P did not render services to a qualifying charitable organization under sec. 1.170A 13, Income Tax Regs. R also asserts that P’s expenses have an indistinguishable personal component.
Held: P’s foster cat expenses qualify as unreimbursed expenditures incident to the rendition of services to a charitable organization. See sec. 1.170A 1(g), Income Tax Regs. P’s services were directed by a charitable organization. P thus rendered services to a sec. Some of P’s expenses are disallowed because they are insufficiently related to foster cat care or cannot be determined with precision.
Held, further, the recordkeeping requirements of sec. 1.170A 13(a), Income Tax Regs. (for contributions of money), govern unreimbursed volunteer expenses of less than $250.
Held, further, P’s records meet the requirements of sec. 1.170A 13(a), Income Tax Regs., because they are acceptable substitutes for canceled checks under the substantial compliance doctrine. See Bond v. 32 (1993). P can deduct foster cat expenses of less than $250.
Held, further, P cannot deduct foster cat expenses of $250 or more. P did not obtain the contemporaneous written acknowledgment from the charitable organization required under sec. 1.170A 13(f)(10), Income Tax Regs.
Held, further, P can deduct a $100 check donation made to a separate charitable organization.
Jan Elizabeth Van Dusen, pro se.
Christina E. Ciu and Rebecca Duewer Grenville, for respondent.
MORRISON, Judge: The Commissioner of Internal Revenue (the IRS) issued a notice of deficiency for the tax year 2004 to petitioner, Jan Elizabeth Van Dusen, determining an income tax deficiency of $4,838. The parties settled all issues except those relating to a $12,068 charitable contribution deduction for Ms. Van Dusen’s expenses of taking care of foster cats.1
We find that taking care of foster cats was a service performed for Fix Our Ferals, a section 501(c)(3)2 organization that specializes in the neutering of wild cats. See infra part I. Some of Van Dusen’s expenses are categorically not related to taking care of foster cats and are therefore not deductible. These expenses are the cost of cremating a pet cat, bar association dues, and DMV fees. See infra part II. Some of Van Dusen’s other expenses are not solely attributable to foster cat care and are not deductible. These expenses are the cost of repairing her wet/dry vacuum and her membership dues at a store. See infra part III. Other expenses are attributable to the services Van Dusen provided to Fix Our Ferals. These expenses are 90 percent of her veterinary expenses and pet supplies and 50 percent of her cleaning supplies and utility bills. Some payments to Orchard Supply Hardware and Lowe’s for pet supplies, however, are disallowed because the amounts spent on pet supplies cannot be determined with precision. In deciding whether Van Dusen kept adequate records of the expenses attributable to her volunteer services, we hold that the regulatory requirements asics for money contributions govern Van Dusen’s expenses of less than $250. Van Dusen has met the requirements for these less than $250 expenses. Her records are acceptable substitutes for canceled checks under the substantial compliance doctrine. For expenses of $250 or more, however, Van Dusen does not have contemporaneous written acknowledgment from Fix Our Ferals. Therefore, these expenses are not deductible.
We also hold that Van Dusen is entitled to a $100 deduction for a check donation to Island Cat Resources and Adoption, a section 170(c) organization. See infra part VI.
We adopt the stipulation of facts and its attached exhibits. Van Dusen, a resident of Oakland, California, is an attorney who cared for cats in her private residence in 2004. Van Dusen volunteered for an organization called Fix Our Ferals and argues that her out of pocket expenses for caring for cats qualify as charitable contributions to that organization. The parties stipulate that Fix Our Ferals is a section 501(c)(3) organization. We find that Fix Our Ferals is eligible to receive tax deductible contributions under section 170(c).3
Fix Our Ferals and Trap Neuter Return
Fix Our Ferals’ mission is to engage in “trap neuter return” activities, which consist of trapping feral cats,4 neutering5 them, obtaining necessary medical treatments and vaccinations, and releasing them back into the wild.6 Fix Our Ferals enlists volunteers to perform these tasks. The volunteers usually return cats to their original neighborhoods, but sometimes cats are moved to safer neighborhoods.
The purpose of trap neuter return is to humanely control feral cat populations and ensure that the cats live in an environment where people are not hostile to them. Fix Our Ferals periodically organizes spay/neuter clinics and educates the public about trap neuter return as a solution to neighborhood cat issues.
After being neutered, the cats must be temporarily housed in volunteers’ private residences while they recover. After the cats recover and have received all necessary medical treatments, they are usually returned to the wild.
Some cats cannot be safely returned to the wild. Typically those cats are young, sick, injured, elderly, or tame.7 Those cats must be cared for domestically. We refer to all care for trapped cats, including temporary housin asics g while cats are recuperating from neutering, as “foster care”. We refer to cats under foster care as “foster cats”.
Some of the cats are not returned to the wild because they are already tame. Volunteers try to tame the other cats that cannot be returned to the wild to make them suitable for adoption. The volunteers then attempt to place the tame cats in no kill shelters or adoptive homes. The success of placing the tame cats depends on shelter availability and people’s willingness to adopt.
Although some of the cats that cannot be returned to the wild are adopted or given to shelters, others remain in foster care indefinitely. More often these cats are sick, elderly, or have other problems requiring long term care. Fix Our Ferals encourages volu asics nteers to provide long term care for these cats in their homes. Foster care, both short and long term, forms an important part of the organization’s mission.
Fix Our Ferals’ Administrative Structure
Fix Our Ferals is a decentralized organization. It has no formal administrative office. Instead, it uses a post office box, a telephone hotline, a website, and asics other internet and phone based methods of communication.
Fix Our Ferals’ official staff, as far as we can surmise, consists of a board of directors and a team of veterinarians. The organization relies on a base of volunteers who trap cats, transport cats, foster cats, staff spay/neuter clinics, educate the public, screen phone calls, raise funds, and recruit volunteers. Some Fix Our Ferals volunteers are members of an informal internet message group through which they coordinate logistics and assist each other with cat related issues. Volunteers also collaborate informally with other cat rescue groups and individuals. Fix Our Ferals does not commonly reimburse volunteers for expenses. It does, however, sometimes provide vouchers for free neutering services. It also reimburses volunteers for emergency care if complications arise after a cat has been neutered at a Fix Our Ferals clinic.
Van Dusen’s Role With Fix Our Ferals
Van Dusen was a Fix Our Ferals volunteer in 2004. She trapped feral cats, had them neutered, obtained vaccinations and necessary medical treatments, housed them while they recuperated, and released them back into the wild. She also provided long term foster care to cats in her home. She attempted to place long term foster cats in one of two no kill shelters, Berkeley East Bay Humane Society or East Bay Society for the Prevention of Cruelty to Animals,8 or otherwise find them adoptive homes. Some foster cats, however, stayed with her indefinitely.
In 2004, Van Dusen had between 70 and 80 cats total, of which approximately 7 were pets. The pet cats had names, but the foster cats generally did not. Most cats roamed freely around Van Dusen’s home (except for bathrooms) and resided in common areas. Less domesticated cats stayed in a separate room called the “feral room”. Some cats lived in cages for taming. Others lived in cages because of illness.
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.
Van Dusen obtained foster cats primarily through the trap neuter return work that she personally performed. She captured homeless cats, had them neutered, cared for them during recovery, and if possible, returned them to the wild. She housed the cats that could not be returned to the wild until an adoption opportunity arose. She obtained the rest of her cats through a loose network of contacts. Some came from Fix Our Ferals affiliates or from the Fix Our Ferals hotline or internet message group. Others came from individual volunteers or other cat rescue organizations.
Van Dusen’s foster care arrangements arose informally, usually by her personal decision or through a series of phone calls, emails, internet postings, or in person conversations. Some cats that she cared for in 2004 had been under her care in previous years, during which she belonged to organizations other than Fix Our Ferals. Van Dusen’s inability to recall precisely how she acquired each of her cats makes it difficult to ascertain how many cats are attributable to a particular organization or contact person. Although Fix Our Ferals was her primary volunteer affiliation in 2004, she admits that she did sometimes assist other groups that year. Van Dusen therefore cannot trace all her foster cats in 2004 to Fix Our Ferals.