Samuel and Carol Seawright owned a 42-acre junkyard in South Carolina, a sprawling kingdom of scrap metal. However, their most significant business challenge wasn’t rust, but rather a serious pest problem. The property was overrun with rats and poisonous snakes like copperheads and rattlesnakes, creating a genuine danger for the owners, their employees, and their customers.
A Feline Solution
After trying various methods of pest control, the Seawrights noticed the local feral cats were excellent hunters. An idea was born: they began leaving out bowls of cat food to encourage the felines to stick around. It worked perfectly. The cats got a reliable meal, and in return, their natural predatory skills made the junkyard a much safer place to work.
It was a simple and effective solution.
The Inevitable Red Flag
As sensible business owners, the Seawrights deducted the cost of the cat food on their tax return. On their Schedule C form, under “Other expenses,” they simply listed “Pet Food.”
The IRS, an organization not known for its appreciation of rustic, feline-based solutions, saw this line item and promptly disallowed the deduction. In the auditor’s eyes, this looked less like pest control and more like someone trying to write off the cost of feeding their personal pets.
A Showdown in Tax Court
The Seawrights believed the deduction was legitimate, so they fought the decision, taking their case to the U.S. Tax Court. The entire dispute boiled down to two of the most important words in the tax code: “ordinary and necessary.”
To be deductible, a business expense must be both.
- “Ordinary” means the expense is plausible and accepted for that particular type of business.
- “Necessary” means it is “helpful and appropriate” for the business.
The Seawrights’ argument was a model of common sense. They had a dangerous snake problem. The cats solve the snake problem. The food keeps the cats there. Therefore, the food is a helpful and appropriate expense for making their business safe.
A Victory for Common Sense
In a decision that should warm the hearts of small business owners and cat lovers everywhere, the Tax Court judge sided with the Seawrights.
The judge found their testimony about the pest problem to be credible and concluded that leaving out food to attract feral cats was a logical and effective way to solve it. Therefore, the court ruled the cost of the cat food was indeed an ordinary and necessary business expense. The deduction was allowed.
The case of Seawright v. Commissioner is a perfect illustration of how business deductions work. The lesson is that an expense doesn’t have to be conventional to be legitimate. If you can draw a clear, direct, and logical line from an unusual expense to a genuine business need (like making your workplace safe), you have a strong case for a deduction.
