IRS Admits Gnomes Are a Legitimate Tax Write-Off
Must prove the tiny bearded men are essential to your small business.
WASHINGTON, D.C. – In a shocking reversal that has accountants scrambling and small business owners rejoicing, the Internal Revenue Service has quietly admitted that garden gnomes can now be claimed as legitimate business expenses – but only if taxpayers can prove the diminutive bearded figures are “essential personnel” for their operations.
The bombshell revelation came to light through a leaked internal memo dated November 15, 2024, obtained exclusively by sources close to the agency. The document, marked “CONFIDENTIAL – FOR SENIOR AUDITOR EYES ONLY,” outlines new guidelines for what the IRS now calls “Non-Traditional Business Entity Deductions” – a category that apparently includes gnomes, but conspicuously excludes their fairy and pixie counterparts.
According to the memo, the policy shift stems from a landmark case involving Gertrude Pennywhistle, owner of Pennywhistle’s Organic Herb Garden in Salem, Oregon. Pennywhistle successfully argued before the U.S. Tax Court that her collection of 47 garden gnomes were not decorative items, but rather “essential night-shift security personnel” protecting her crop from supernatural pests.
“People think I’m crazy, but those little guys work harder than any human employee I’ve ever had,” Pennywhistle told reporters from her thriving herb garden, surrounded by an army of colorful gnomes in various poses. “Ever since I hired them – I mean, installed them – my midnight crop losses dropped by 94 percent. The IRS finally recognized what I’ve known all along: gnomes are the backbone of American small business.”
The leaked memo reveals that the IRS received over 3,200 similar claims last year alone, with business owners from coast to coast attempting to deduct gnome-related expenses. Initially dismissed as frivolous filings, the sheer volume of claims prompted an unprecedented six-month investigation involving what sources describe as “elite auditors with specialized training in paranormal accounting.”
Dr. Thornton Grimwald, former economics professor at Miskatonic University and author of “Supernatural Economics: When Magic Meets Money,” believes this decision represents a seismic shift in federal tax policy.
“What we’re witnessing is nothing short of governmental acknowledgment of a shadow economy that’s existed for centuries,” Grimwald explained during a clandestine meeting at an undisclosed location. “The IRS has finally admitted what occult economists have long suspected – that gnomes have been contributing to America’s GDP far longer than anyone dared to publicly acknowledge.”
The newly released guidelines are surprisingly specific. To qualify for the deduction, business owners must provide photographic evidence of gnomes “actively engaged in business-related activities,” maintain detailed logs of their “work schedules,” and submit annual performance evaluations. Acceptable gnome-related expenses include initial “hiring” costs, protective weather gear, and even seasonal bonuses in the form of tiny tools or accessories.
However, the IRS warns that fraudulent gnome claims will be “aggressively prosecuted.” Red flags include claiming deductions for gnomes found indoors during business hours, gnomes lacking proper business attire, or any gnome that appears to be “obviously decorative rather than functional.”
Industry insiders suggest this policy change may be part of a broader government initiative to formally recognize what conspiracy theorists have long claimed – that magical beings have been integrated into the American workforce for decades. Sources within the Treasury Department hint that similar deductions for business-essential gargoyles and productivity-boosting garden fairies may be announced before year’s end.
Tax preparation companies are already scrambling to train their staff in what’s being called “mythological accounting practices,” while major retailers report unprecedented demand for business-appropriate gnome attire.
The IRS declined to comment officially, but one anonymous auditor admitted, “We can’t keep pretending they’re not there. The numbers don’t lie – and apparently, neither do the gnomes.”
The characters and events depicted in this story are entirely fictitious. Any similarity to real persons, living or dead, or to actual events is unintentional and purely coincidental.
