Bus. Expense - Hearing Aid for Physician

[Uncle Sam]

I have a self employed (Schedule C) physician client who for 2010 paid for a hearing aid from the business - claiming that if he didn't have it he couldn't hear his patients and it would effect his practice income - and that he doesn't use it after business hours (which I find hard to believe).

His business income nets over $ 350G, and the hearing aid is about $ 4G.
He IS aware that IRS CAN and possibly WOULD disallow it and is willing to take the chance - since the hearing aid cost is immaterial to his total income.

He realizes that taking it as a Schedule A medical deduction he'll get -0- deduction after the 7.5%.

As much as I am reluctant to take it, since he is normally tax compliant in all other respects, due to the 1% amount involved - and client IS aware of the tax consequences - I am willing to risk this situation.

This is a client where I don't have to be concerned with any of the normal abuses - T & E expenses, personal indulgence of business checkbook, etc - as there are none at all.

Would just like your thoughts.

[veritas]

My first thought

Will he only wear it at work?

[ChEAr$]

I

As much as I am reluctant to take it, since he is normally tax compliant in all other respects, due to the 1% amount involved - and client IS aware of the tax consequences - I am willing to risk this situation.

(some snipped for brevity.)

Would just like your thoughts.

Don't. Stand your ground. Consult circular 230.

[veritas]

Second thought

Tell him to get an HSA.

[Lion]

Or an HRA

Or, an HRA...

[veritas]

We could extrapolate the Dr's thinking

I need glasses to do my work.....

I need orthopedic shoes......

I need Jack Daniels after work....

[erchess]

My Two Cents

I think the question comes down to whether it's believable that he only uses the hearing aides for work. I don't think it is.

[Lion]

Dr

I had a doctor friend in CA that wore his toupee only at work. He did not try to deduct it as a business expense, though.

[BHoffman]

I don't think doc's hearing aid is going to fly as ordinary and necessary business expense.

Glasses, special shoes, hearing aids, and Jack Daniels are ordinary and necessary personal medical expenses.

[ChEAr$]

I don't think doc's hearing aid is going to fly as ordinary and necessary business expense.

Glasses, special shoes, hearing aids, and Jack Daniels are ordinary and necessary personal medical expenses.

Well darn! I was just getting my hopes up about my favorite Scottish amber coloured medicine taken to keep my blood thin, so that I could continue year after year to serve the American taxpayer.

Maybe if I keep a bottle of single malt at the office to share with clients?

[taxea]

I would allocate the expense for the hours he works in a year against the total hours in the year and the life expectancy of the hearing aid.

[dyne]

I will be purchasing a SECOND better hearing aid soon for use ONLY during the tax season and I have been pondering deducting this as a business expense on schedule C. I will use my older hearing aid after April 15. I doubt that I will claim it as I tend to be ultra-conservative in tax matters.

[BHoffman]

I don't think a hearing aid is an ordinary business expense, although it might be necessary.

I think it must be both ordinary AND necessary to deduct as a business expense.

[New York Enrolled Agent]

He IS aware that IRS CAN and possibly WOULD disallow it and is willing to take the chance - since the hearing aid cost is immaterial to his total income.

As much as I am reluctant to take it, ...- I am willing to risk this situation.

I hope you're getting a large fee and you read §6694(a) carefully - you clearly do not have substantial authority to take this position and I don't think you even have a reasonable basis with a disclosure.

I would suggest you read what the Tax Court said in Bakewell 23 TC 803. The fact pattern seems very close except Bakewell was an attorney and not a doctor.

One small snip in the taxpayer's loss: [start]Even if it is used in petitioner's business, in fact even if it is necessary for his successful law practice, the device is so personal as to preclude it from being a business expense. [end]

[WhiteOleander]

Ask the Dr if he would break the law and his ethics for you? Would he prescribe a drug that was not approved by the FDA because you think it would benefit you?