My chronicle of how the IRS and Tax Court affect taxpayers' daily lives.

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Monday, October 12, 2009

Letter Ruling - Baby Formula is not elgible medical deduction

A private letter ruling is a request by an indvidual taxpayer to rule on a very specific tax issue before the taxpayer takes action.  The PLR is considered the IRS' official position, but is non-precidential.  In other words, unless your situation is exactly the same as that laid out within the private letter ruling, you may not use it to avoid penalties should you use the letter in determining your own tax liability. 

You may request a PLR by sending a letter stating all pertinent facts to:

Ruling Request Submission

Internal Revenue Service
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044

PLR fees range from $75 to $50,000 depending on the circumstances

In today's case, a taxpayer who received a double mastectomy and therefore was unable to breastfeed her child had to purchase infant formula to meet the baby's nutritional needs.  IRC §213 governs medical deductions, and defines a deductible medical expense as one that "is paid for the diagnosis, cure, mitigation, treatment or prevention of disease."  More specifically, later regulations limit the deduction for those expenses which are paid to treat an acute medical condition, and disallow those expenses which are paid to improve general health. 

Taxpayers have previously attempted to deduct special diet food as a medical expense and have generally lost.  In one case, the Tax Court found that the taxpayer, who suffered from Crohn's disease, failed to establish that his diet was a treatment for a condition, instead of a substitute for a normal and healthy diet.  The food he consumed was merely a substitute for food normally consumed by a healthy person, and he was not entitled to a medical deduction. 

The PLR snotes "in the instant case, taxpayer's child is a healthy baby.  The formula satisfies the baby's normal nutritional needs.  Therefore, the infant formula is properly viewed as food that the infant would normally consume."  Accordingly, the PLR does not allow for the deduction.

Aaron's Take:  In accordance with how the law is written, I agree with the IRS' determination.  For similar reasons, a person's gym membership, diet food for obese people, and over the counter drugs are not generally deductible. 

How is this case potentially deductible?  If the baby had vitamin deficiencies and needed a specific type of fortified baby formula, this situation would be different.  Although the argument can be made that the formula is only necessary because of the mother's inability to produce milk, her milk would only have satisified the baby's minimum nutritional needs, and should the deduction be allowed, I'm sure some enterprising taxpayer would try to deduct the mother's food intake because "if the mother doesn't eat, than the baby won't get the right nutrition." 

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Aaron Blau, E.A. is the Vice President of the Central Arizona Chapter of Enrolled Agents and a member of the Government Relations Committee of the National Association of Enrolled Agents. The opinions and ideas expressed here are in no way representative of the official position of the National Association of Enrolled Agents, Arizona Society of Enrolled Agents or the Central Arizona Chapter of Enrolled Agents.

For official comments, please e-mail NAEA Director of Communications at or Arizona Society president

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