Medcial Expense Deduction - Questions

[JohnH]

Couple of questions that recently arose.
I'd like to see if others agree on the deductibility of these two items:

1) Patient is diagnosed with Macular Degeneration - an eye condition commonly know as AMD. Among recommendations from the Opthamologist, patient is advised to take a special combination supplement/vitamin formulation known as AREDS to help forestall the effects of AMD. This is a standard recommendation for AMD patients, as a result of a study performed by the NIH many years ago. The AREDS combination can be purchased over the counter. Deductible or not?

2) Patient has an upcoming doctor visit and he goes to a walk-in lab & gets a diagnostic test which is related to the visit. His reasoning is that he knows the doctor will order the test, but then there will need to be a follow-up visit. So he gets the test ahead of time, without a prescription, and at his expense. Deductible or not?

[Burke]

1) Seems to be allowable as "recommended by a doctor for a specific medical condition."
2) If the test is for general medical treatment and is performed by a qualified medical professional, I don't have a problem with it.

[Kram BergGold]

Concur

I would deduct both.

[Lion]

I would ask him to get a prescription from his doctor for the AREDS, even if it is available over the counter. I prefer a good paper trail.

In fact, he can ask his doctor to call the lab in advance, also. The doctor probably prefers to have the test results in hand when he sees your client.

[TAXNJ]

I would ask him to get a prescription from his doctor for the AREDS, even if it is available over the counter. I prefer a good paper trail.

In fact, he can ask his doctor to call the lab in advance, also. The doctor probably prefers to have the test results in hand when he sees your client.

Agree to get a prescription to meet requirement of:

Section 213(d) (3)Prescribed drug.—
The term “prescribed drug” means a drug or biological which requires a prescription of a physician for its use by an individual.

[spanel]

Need a prescription for any over the counter drugs.

Chris

[JohnH]

Here's the quote from Pub 502. (Yes, I know the Pubs aren't the Regs.)
But this wording is in there for some reason.
It clearly makes allowance for this situation by what it says after the word "unless".

--->Nutritional Supplements
You can't include in medical expenses the cost of nutritional supplements, vitamins, herbal supplements, “natural medicines,” etc. unless they are recommended by a medical practitioner as treatment for a specific medical condition diagnosed by a physician. These items are taken to maintain your ordinary good health and aren't for medical care. <---

The routine recommendation by virtually all medical practitioners is that patients diagnosed with AMD should use the AREDS supplements, but these supplements are not available by prescription. This is why I am raising the question.

Of course, maybe in this case the Pub is simply mistaken...

[TaxGuyBill]

As long it is in writing, for a specific health condition, and not for general nutritional needs, it should be deductible.

I think it is originally based on Revenue Ruling 55-261 which allow special foods to be deductible (see #15 on the link ... whiskey was deductible).

http://www.stepnowskilaw.com/IRS55-261.html

There have been numerous other rulings since then, but it seems like they are all based on the original 55-261.

[TAXNJ]

As long it is in writing, for a specific health condition, and not for general nutritional needs, it should be deductible.

I think it is originally based on Revenue Ruling 55-261 which allow special foods to be deductible (see #15 on the link ... whiskey was deductible).

http://www.stepnowskilaw.com/IRS55-261.html

There have been numerous other rulings since then, but it seems like they are all based on the original 55-261.

It is based on a "prescription" by a medical doctor (that's what "in writing" means) whether you look at the code or revenue ruling.

[FEDUKE404]

What exactly IS a &quot;prescription drug&quot; ??

One would think the definition of a "prescription drug" would be somewhat self-explanatory. Doctor writes a prescription, patient's insurance company considers payment, pharmacist dispenses.

While there obviously are gray zones for other items "suggested" by a doctor (think daily aspirin, vitamin supplement, shoes for a regular walk) it is a stretch for those to cross the threshold into deductibility.

OTOH, you have cases like ibuprofen: Buy a bottle of same at pharmacy and take four 200 mg tablets for injury. OTC = no deduction. Doctor writes prescription for 800 mg tablets, and then you have a clearly deductible prescription medication.

FWIW, I usually go by annual printout of prescription drugs that any pharmacy will provide upon request.

From current IRS Pub 502:
You can include in medical expenses amounts you pay for prescribed medicines and drugs.
A prescribed drug is one that requires a prescription by a doctor for its use by an individual.
You can also include amounts you pay for insulin.
Except for insulin, you can't include in medical expenses amounts you pay for a drug that isn't prescribed.

FE

[JohnH]

Not necessarily so.
It is true that all doctors' prescriptions are in writing, but it is not true that all writing by doctors is a prescription. They often write treatment plans and make other recommendations. It is a universal recommendation in the treatment and disease management plan for the patient diagnosed with AMD to take the AREDS supplements. Hence the question.

[JohnH]

I think this is the central issue. Nobody is claiming the AREDS supplement is a drug, so that's essentially off the table. The question revolves around whether the supplement is tax deductible, and the wording in Pub 502 addressing supplements suggests that it may be.

[FEDUKE404]

Reading between the lines

I think this is the central issue. Nobody is claiming the AREDS supplement is a drug, so that's essentially off the table. The question revolves around whether the supplement is tax deductible, and the wording in Pub 502 addressing supplements suggests that it may be.

I assume you are referring to page 17 ("nutritional supplements") of https://www.irs.gov/pub/irs-pdf/p502.pdf .

While I see your point, I'm not sure the "recommendations" would cross the threshold. Many heart attack patients take a daily aspirin. My doctor recommends two Vitamin D tablets daily. Deductible?? What do you do with a "recommendation" to eat more expensive gluten-free and/or organic food?

Like many things in the IRS world, they just like to keep us guessing.

FE

[TAXNJ]

Not necessarily so.
It is true that all doctors' prescriptions are in writing, but it is not true that all writing by doctors is a prescription. They often write treatment plans and make other recommendations. It is a universal recommendation in the treatment and disease management plan for the patient diagnosed with AMD to take the AREDS supplements. Hence the question.

Think at this point you have your answer as to what you are going to do. We are not the ones to convince. Keep in mind your quote "If it's too good to be true, then it's neither good nor true."

[TAXNJ]

JOHN H - more info because remembered seeing what you are saying

Not necessarily so.
It is true that all doctors' prescriptions are in writing, but it is not true that all writing by doctors is a prescription. They often write treatment plans and make other recommendations. It is a universal recommendation in the treatment and disease management plan for the patient diagnosed with AMD to take the AREDS supplements. Hence the question.

There has been a change with OTC medicines since the IRS released IRS Notice 2010-59, which provides additional information on this requirement. Wondering if that is causing any confusion as to what we knew prior to that notice? see below:

SOURCE: LAWLEY BENEFITS GROUP
Note that expenses incurred for OTC medicines or drugs purchased without a prescription before January 1, 2011,
may be reimbursed tax-free at any time, pursuant to the terms of the plan.

"The Patient Protection and Affordable Care Act (PPACA) changed the requirements related to reimbursements for over-the-counter (OTC) drugs. These changes affect health FSAs, HRAs, HSAs and Archer MSAs, which will need a prescription to reimburse the costs of OTC drugs purchased after December 31, 2010.

On September 3, 2010, the IRS released IRS Notice 2010-59, which provides additional information on this requirement. The notice states:

• Reimbursement is restricted to prescribed drugs, insulin and OTC drugs that have a prescription;"

http://www.lawleyinsurance.com/wp-content/uploads/2014/09/IRSGuidance-OTCDrugs.pdf

SOURCE: IRS
Affordable Care Act: Questions and Answers on Over-the-Counter Medicines and Drugs
1. How are the rules changing for reimbursing the cost of over-the-counter medicines and drugs from health flexible spending arrangements (health FSAs) and health reimbursement arrangements (HRAs)?
A. Section 9003 of the Affordable Care Act established a new uniform standard for medical expenses. Effective Jan. 1, 2011, distributions from health FSAs and HRAs will be allowed to reimburse the cost of over-the-counter medicines or drugs only if they are purchased with a prescription. This new rule does not apply to reimbursements for the cost of insulin, which will continue to be permitted, even if purchased without a prescription.

3. When will the changes become effective?
A. The changes are effective for purchases of over-the-counter medicines and drugs without a prescription after Dec. 31, 2010. The changes do not affect purchases of over-the-counter medicines and drugs in 2010, even if they are reimbursed after Dec. 31, 2010.

https://www.irs.gov/uac/affordable-care-act-questions-and-answers-on-over-the-counter-medicines-and-drugs