Question

Nicole is a self-employed "entertainer" at a famous club in Atlanta. She dances. Nicole wishes to have cosmetic surgery to enhance her "assets". She asks your advice as her accountant as to whether this would be a legitimate business expense that would increase her revenue stream. How will you answer Nicole, applying U.S. Tax Code for small businesses?

Answer 1

The issue in the given question is whether Enhancement of assets qualify as business deduction. The issue can be dealt by using facts of the case of Cynthia Hess Vs Commissioner of Internal Revenue, commonly called the case of Chesty Love.

The plaintiff was a "exotic" dancer who had her assets unusually enlarged by undergoing the enhancement surgery. She claimed the expenses incurred on the surgery as business related expenditure since bigger assets would generated better and more value of tips The IRS accepted the claims made as bigger assets were essential for her act.

Accordingly IRS held that,

1. Any augmentation of assets should be required for the employment purposes and
2. Such augmentation is not suitable for everyday use.

Plaintiff had undergone drastic asset enhancement and hence, were usual and unsuitable for everyday usage.

Considering the facts of the above case and requirement stated by IRS as above, we frame our advise as such.