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Bet They Didn’t Think About This

by David Huff on June 11, 2015

 
Matthew Person, CPA David Huff, CPA, PFS, MS Todd Wilson, CPA Person Huff CPA Group 3200 Lake Villa DriveMetairie, LA 70002 (504) 780-8299 Fax 1-800-799-1292 www.personhuffcpa.com
Bet They Didn’t Think About This Last week, a New York judge issued writs of habeas corpus on behalf of two chimpanzees named Hercules and Leo, currently living in a research lab at the State University of New York in Stony Brook. The next day, she walked back the scope of her ruling, emphasizing she was merely directing the university to appear in court. Still, the decision gives the chimps a day in court and possibly clears the way for them to move from the lab to a sanctuary in Florida.

 

Animal rights activists were thrilled. Natalie Prosin, Executive Director of the Nonhuman Rights Project, told Science magazine, “This is a big step forward . . . . We got our foot in the door. And no matter what happens, that door can never be completely shut again.” Harvard Law School professor Laurence Tribe commented that habeas corpus should be available for sentient beings other than humans. (Even cereal spokesman Tony the Tiger expressed his support for Leo and Hercules, saying “They’re grrrrreat!”)

 

Naturally, that got us to thinking. What would our friends at the IRS think about the ruling? If animals can be “legal persons,” why can’t they be taxpayers? And what will those taxes look like?

  • Everyone knows that circus elephants work for peanuts. So how many peanuts will the IRS get? Can elephants pay in shells? If elephants really never forget, do they still have to keep paper receipts?
  • Squirrels spend long hours every fall gathering acorns for winter. Should they pay their taxes when they bury the acorns, like with a Roth IRA? Or should they pay when they dig them back up for food, like with a 401k? What if an acorn gets buried a little deep and grows into a mighty oak? Can the squirrels claim valuable timber depletion allowances? What about casualty losses from lightning strikes?
  • Beavers across the northern states are busy as beavers building dams. What sort of property taxes should they pay on their homes? How should they calculate their depreciable basis in logs, leaves, and twigs? (Don’t even get us started on tax strategies for bird nests!)
  • Many animal species, including prairie voles, French angelfish, and certain ducks, mate for life. (If you’re divorced, and bitter about it, maybe you should have married a duck.) Does that mean ducks can file jointly? Will they get valuable tax advantages, like the unlimited marital deduction for estate taxes, that single animals and heads of households have to do without?
  • Have you ever treated your dog to a biscuit for fetching the paper? Good dog! But watch out! Strict withholding requirements may make tax time ruff. If you miss a deadline, you can count on more than just a swat with a rolled up newspaper! Dogs who work for their supper owe hefty employment taxes, too. And how on earth do you e-file 15.3% of a Milk Bone?

Lots of questions, right? Well here’s one thing we can know for sure. When animals start paying taxes, they’ll want to pay less. And they can do it the same way you do — with a plan. April 15 may have come and gone, but there’s never a bad time to pay less. So call us, and let us help you keep more acorns!

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