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Author: cfdunton One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121114  
Subject: Contacting IRS Date: 8/6/2001 1:32 PM
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Does anyone know where to write the IRS to get their opinion on the deductibility of a spa prescribed by an orthopedist? Someone I know is trying to pay for at least part of the spa out of their medical flexible spending account and the employer rejected it. I thought it might be helpful to get a written opinion from the IRS. They have an email site for comments but it says it is not for tax questions.

Thanks for any help.
Carole
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Author: Charlie48K Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53119 of 121114
Subject: Re: Contacting IRS Date: 8/6/2001 6:48 PM
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Does anyone know where to write the IRS to get their opinion on the deductibility of a spa prescribed by an orthopedist? Someone I know is trying to pay for at least part of the spa out of their medical flexible spending account and the employer rejected it. I thought it might be helpful to get a written opinion from the IRS. They have an email site for comments but it says it is not for tax questions.

Revenue Procedure 1996-1 covers IRS written opinions. I don't think your friend wants to go through that. He'd have to hire an expensive CPA or lawyer and pay fees. You can call the IRS number in the phone book and ask them for their option. Be aware that a significant number of times, that oral option is wrong and you can't rely on it in an IRS audit. Your friend needs to talk to an experienced CPA or lawyer.

My personal opinion is he probably doesn't have a medical expense deduction. See IRS Publication 502. The prescription from the doctor, doesn't make it deductible, other things have to occur. For one thing it can't be to improve the general health of the patient, it has to be necessary for that exact ailment. Also, if it improves the value of the home, it's not deductible to that increase in market value. They really will question the purchase of a spa.

Also, if he does get money from the plan and it's disallowed on an audit he has non-qualified withdrawls which are subject to a 15% penalty. He also has problems with other penalties if he doesn't have a written opinion from a CPA or lawyer supporting the deduction.



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Author: LNBCHIP Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53179 of 121114
Subject: Re: Contacting IRS Date: 8/8/2001 1:14 PM
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- My personal opinion is he probably doesn't have a medical expense deduction. See IRS Publication 502. The prescription from the doctor, doesn't make it deductible, other things have to occur. For one thing it can't be to improve the general health of the patient, it has to be necessary for that exact ailment. Also, if it improves the value of the home, it's not deductible to that increase in market value. They really will question the purchase of a spa.

I have to disagree on the deductibility of the spa. Deductions have been allowed for the installations of elevators, swimming pools, and central air conditioning units according to CCH's 2001 Master Tax Guide. This spa purchase, as a result of a physician's prescription, would not appear to be any harder to explain. However, you are definitely right about the reduction in the deductible amount for the amount of increase in market value. (See Reg 1.213-1(e)(1))

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