Monday, January 19, 2009

Can I deduct the cost of a special diet for my child?

Q. My son's physician has prescribed a special diet to treat my child's medical condition. Is that a deductible medical expense?

A. Yes, if the physician has actually written out a prescription (and not just given you a paper as a guide). As a rule of thumb,  it would be deductible, if you can use the prescription to avoid sales tax on the items, if they would ordinarily be subject to sales tax.

Treasury Regulation section 1.213-1(e)(ii) states: "ii) Amounts paid for operations or treatments affecting any portion of the body, including obstetrical expenses and expenses of therapy or X-ray treatments, are deemed to be for the purpose of affecting any structure or function of the body and are therefore paid for medical care. * * * Deductions for expenditures for medical care allowable under section 213 will be confined strictly to expenses incurred primarily for the prevention or alleviation of a physical or mental defect or illness. * * * However, an expenditure which is merely beneficial to the general health of an individual, such as an expenditure for a vacation, is not an expenditure for medical care."

In my opinion, taxpayers will get different answers to the question posed from different auditors. However, in my opinion, special diets to ameliorate or "cure" a medical condition are "treatments affecting [a] portion of the body" and therefore meet the definition of "medical care." Further, since this care is for the alleviation or cure of "a physical or mental defect or illness," such expenditures are deductible as medical expenses under IRS Code Section 213.

The IRS, if it challenges the deduction, could argue that if the cost of substituting one type of flour for another to meet the strictures of a specific diet does not exceed the cost of the "typical" flour, there is no medical expense. For example, if the cost of oat flour is $4.00 per pound and the cost of wheat flour is also $4.00 per pound, the IRS would probably argue that the money spent for the oat flour is not a deductible medical expense. If, however, the cost of the oat flour is $10.00 per pound versus $4.00 per pound for the wheat flour, I can't see how IRS could argue that a $6.00 per pound deduction would be improper.

See Circular 230 Notice, below.

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