TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

A Member of the Law Professor Blogs Network

Tuesday, October 13, 2009

IRS: Infant Formula Not Deductible by Mother With Double Mastectomy

Pink Ribbon In honor of Breast Cancer Awareness Month, the IRS has released Priv. Ltr. Rul.  2009-41-003 (July 1, 2009) (released Oct. 9, 2009):

On Date 2, Taxpayer had a physician advised double mastectomy to address medical conditions X and Y. On Date 3, Taxpayer gave birth to a healthy child. Due to her double mastectomy, Taxpayer was unable to breastfeed her child and had to purchase infant formula to meet the baby's nutritional needs. ...

Rev. Rul. 55-261, 1955-1 C.B. 307, holds that the cost of special foods and beverages qualifies as a deductible medical expense if the foods or beverages (a) are prescribed by a physician for alleviation or treatment of a specific illness, (b) are in addition to the taxpayer's normal diet, and (c) in no way are a part of the nutritional needs of the patient, and if a statement as to the particular facts and to the food or beverage prescribed is submitted by a physician. However, when that special food or beverage is taken as a substitute for food or beverage normally consumed by a person to satisfy normal nutritional requirements, the expense is personal and is not deductible as a medical expense

Rev. Rul. 2002-19, 2002-16 I.R.B. 778, holds that individuals participating in a weight loss program may not deduct the cost of purchasing reduced-calorie diet food because the foods are substitutes for the food the individual would normally consume to satisfy nutritional requirements. Rev. Rul. 2002-19 cites to and restates the holding of Rev. Rul. 55-261.

In Massa v. Commissioner, T.C. Memo 1999-63, aff'd without published opinion 208 F.3d 226 (10th Cir. 2000), the Tax Court found that the petitioner, who suffered from Crohn's disease, failed to establish that his special diet was other than a substitute for a normal diet. The court was not convinced that his diet, although followed for medical reasons, differed from the diet of an ordinarily health conscious individual. The court rejected taxpayers' claims for deductions for special foods which were found to be merely substitutes for foods normally consumed by an individual. The court held that the petitioner was not entitled to a medical expense deduction for his diet.

In the instant case, Taxpayers' 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 and use to satisfy its nutritional requirements. Unless the formula meets the criteria under Rev. Rul. 55-261, the expense of the formula is a nondeductible personal expense under § 262.

Therefore, the infant formula is properly considered food for the infant, and is not a medical expense as that term is defined under § 213. Accordingly, Taxpayer's request to treat expenditures for infant formula for a healthy infant as a medical expense under § 213 is denied.

Update: The TaxGirl.

http://taxprof.typepad.com/taxprof_blog/2009/10/infant-formula-not.html

IRS News, Tax | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341c4eab53ef0120a5e1f99b970b

Listed below are links to weblogs that reference IRS: Infant Formula Not Deductible by Mother With Double Mastectomy:

» Infant Formula Not a Medical Expense from taxgirl
Its somehow appropriate that the IRS would release a private letter ruling regarding a double mastectomy in October (in case youre not aware, its Breast Cancer Awareness month). Here are the facts: Taxpayer had a double mastecto... [Read More]

Tracked on Oct 14, 2009 3:29:56 AM

» Got Deductions? from Roth & Company, P.C.
The IRS rules that a double-mastectomy patient cannot deduct infant formula expenses as a medical expense, reports the TaxProf. Tax... [Read More]

Tracked on Oct 14, 2009 5:51:08 AM

» Baby forumula is not deductible from Don't Mess With Taxes
Having a baby, so I'm told, is a major challenge. The mothering concerns of one woman were intensified when, because of a double mastectomy, she was forced to feed her child infant formula. In the hopes the tax code could help somewhat, she sought to d... [Read More]

Tracked on Oct 14, 2009 7:16:07 AM

Comments

As much as I would love to channel my faux outrage I think the IRS is hands-down correct in this case.

And for the record, I can't deduct the small fortune I've spent on Acupuncture for my health in order to remain healthy.

And for the record I've known women who fed their babies formula because they just did not feel comfortable with that nasty breast feeding.

Good for the IRS.

Posted by: Paul A'Barge | Oct 14, 2009 5:07:53 AM

@Paul A'Barge: Acupuncture fan and you think breast feeding is "nasty"? What an amazing combo. The only thing "nasty" is formula. Breast milk is fair and away the best thing for a child.

Posted by: Eric B | Oct 14, 2009 6:20:06 AM

Taking the letter at face value, I cannot see where the IRS is wrong in this decision, no matter how much I would like for it to be wrong.

Posted by: Donna B. | Oct 14, 2009 6:59:13 AM

I'm curious as to why it's not a matter of supplementation rather than replacement - that is, a normal person's nutritional needs are met with $X and now I spent $Y because of my medical condition and thus my deductible amount, $Z = $Y - $X.

I mean, the USDA and others have spent a lot of money on creating "baskets" of food consumed at various income levels and pricing them and adjusting the prices annually and so forth, right? Extra expense plus medical reason = deductible?

(not that this is meant to be descriptive of how things are, just my idea of how things ought to be, assuming I'm stuck with an IRS and complicated deduction rules to begin with...)

Posted by: Sarah | Oct 14, 2009 9:26:55 AM

If Mom had hired a wet nurse at the recommendation of her physician, would that cost be tax deductible? If so, why would formula not be deductible?

Posted by: Harmon | Oct 14, 2009 9:36:54 AM

While my heart goes out to this lady, I can see why this wouldn't be tax deductible. There are plenty of reasons why a woman couldn't breastfeed her baby (adoptive mom, can't make enough milk, health reasons/medications incompatible with breastfeeding, etc.), and as far as I know, you still can't write off formula in those cases, either. Besides, I don't think the IRS would wanna get anywhere near that whole breast vs. bottle debate, anyway.

Posted by: KoryO | Oct 14, 2009 10:08:56 AM

To quote from the ruling...

Section 1.213-1(e)(1)(ii) of the Income Tax Regulations provides that the deduction for medical care expenses will be confined strictly to expenses incurred primarily for the prevention or alleviation of a physical or mental defect or illness.

Mom has a physical defect as a result of the mastectomy - she cannot produce breast milk. Formula is a substitute for breast milk and therefore alleviates the defect.

Someone who has had an amputation can pay to modify a car to allow them to drive, and those costs are deductible. The car is perfect usable without the modification. How is this any different? I'm not trying to compare a healthy baby to a car, but in both cases, these are helping someone with their disability provide "normal" function, which in this case includes breastfeeding.

You are correct about 7.5% of AGI, but an expense must be deemed deductible to qualify for use of an FSA. So this taxpayer cannot use an FSA to pay for infant formula either, although there are plenty of questionable items on the approved FSA list - including clarinet lessons (as a medical expense, for an overbite).

Last point - check out H.R. 3445, which has been introduced, it seems, to overrule the IRS ruling in this case.

Posted by: Taxpayer | Oct 14, 2009 1:00:34 PM

My mom quit breastfeeding me fifty-nine years ago. May I deduct my nourishment since that time?

When someone isn't sure of an answer, just rely on Tim Geithner's tried and true formula of consulting TurboTax.

Posted by: Woody | Oct 14, 2009 1:19:20 PM

Sorry Paul but...

"(c) in no way are a part of the nutritional needs of the patient"

Seems like it didn't meet this rule if you consider the baby the patient. However if the patient is the mother than I guess it doesn't apply. Since the baby wasn't the patient it cannot apply. So the IRS was wrong.

Seems to me that baby formula is analogous to an artificial limb for an amputee. It performs the function of the breast in the case of the amputated breast.

Posted by: Brian Macker | Oct 14, 2009 5:06:45 PM

Good for the IRS. Sounds like this mother needs a reality check. I've never heard of a mother who chose not to breast feed her infant asking for a tax deduction for formula. Please tell me she didn't want to take the cost of disposable diapers off her taxes too. In which case I would hope the IRS would tell her to purchase cloth diapers and crank up the washing machine and the dryer.

Posted by: Diane | Oct 14, 2009 10:08:51 PM

I dont see an issue with the IRS ruling on this one. Many babies drink formula - it is not a rarity. Nor is the expectation that you must feed them something. While tragic that she was unable to breastfeed I support the IRS finding that it is not tax deductible.

Posted by: LDAV45 | Oct 15, 2009 5:08:58 AM