I love reading tax cases that are quirky, a little bit out of the ordinary, that seem as if they never should have been litigated. I just came across one from 1963, Daniels v. Comm., 41 TC 324. The decision on deductibility is particularly appropriate for this time of year, as the filing deadline approaches, and one or two of your clients might be wondering why a particular expense can't be deducted.The tax year in question was 1960, when Fred Daniels and his wife Eleanor resided at 190 Salisbury Street in Worcester, Mass., and had a fallout shelter constructed. It measured 40 feet long by 10 feet wide and had 30-inch thick granite and cinder block walls, and a reinforced concrete roof approximately eight inches thick. The shelter had heating and electricity, and water could be brought in from an artesian well.

The couple, in their seventies, submitted a letter from their doctor recommending that they build a fallout shelter, and pointing out that in case of disaster or the advance of nuclear fallout toward New England, the couple's shelter would reduce anxiety which otherwise would affect Fred's heart and hypertension condition.

What I found so interesting was the comprehensiveness of the opinion by Judge Opper. It pointed out that there were public fallout shelters in the Worcester area, defined "fallout radiation," and, in great detail, described how sickness and death could result. For example, the opinion reads, "As the dosage increases, a person would experience nausea, vomiting, unusual bleeding, diarrhea, loss of hair, and possibly death. Death is certain upon exposure to 1,000 roentgens over a period of a few days."

The opinion even explained that the total radiation level in Worcester was approximately 0.00004 roentgen in 1960, observed an older person would be affected more by a radiation overdose, and indicated that, "no medication could protect a person against the effects of gamma radiation resulting from a nuclear explosion."

The Court denied the deduction, concluding, "It seems clear that the construction of petitioners' fallout shelter was not for the 'diagnosis, cure, mitigation,' or 'treatment' of an existing disease. Any justification for the deduction of its cost as a medical expense must arise from its characterization as 'prevention.' But we have been referred to no authority extending the concept of prevention to so remote a hazard to health ... ."

So. as the tax season closes, please e-mail me if any of your clients this year wanted to claim a deduction for something as strange as a fallout shelter.

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