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Rocky Mountain Environmental Health Association

Income Tax Deductions for Medical Expenses

Please note - the following information is not legal advice, and that anyone pursuing these ideas should consult with a qualified professional.

Many patients who have become sensitive to chemicals or chemicals in food need to make changes in their diet or home environment that the Internal Revenue Service (IRS) allow as medical deductions. If your doctor should advise you to eat chemically less contaminated foods, change to electric house heating, cooling or other appliances, or change your carpeting, ask him for a prescription that enumerates these medically necessary changes. Attach a copy of this prescription to your income tax return.

Some of the background for this information is based on an important decision handed down by the IRS in December 1976 in the case of Randolph versus the IRS. Columnist Sylvia Porter summarized the meaning of this tax court decision as follows: "If you are on a medically required diet, you can take an itemized medical expense deduction for the extra dollars you paid for the diet food and count on support from the Tax Court if the IRS disallows your claim." The judge in the Randolph case interpreted this to mean that one-half of your costs for organic food could be taken as a medical deduction. This would be listed under Other Medical Expenses. Should you experience an audit and the IRS auditor is not familiar with this deduction, ask him to review test case 67-TC 35 US Tax Court Docket number 2964-74 filed on December 16, 1976. by Theron G. Randolph and Janet and Mary Randolph against Commissioner of the IRS.

(Technical note - has the IRS 'acquiesced to Randolph'?)

As with all deductions, it is very important you save all your receipts - not just canceled checks - to be able to document the deduction claim. Other ecology patients have found that the deduction of organic food was not questioned so much as was the use of organic food by their family members who may not be overtly ill and under medical care. Problems can be prevented by having a letter from the doctor listing all family members needing to be on a diet of less chemically contaminated foods. It is not reasonable to prepare another diet for the family and it is important to realize that even cooking odors from commercial foods may cause reactions for the family member who is ill.

The Department of the Treasury Internal Revenue Service has a publication you can request - Medical and Dental Expenses - Publication 502. It states that "you may include payments for special equipment installed in a home or similar improvements made for medical reasons, as as a medical expense even if they are capitol improvements. If these improvements are permanent improvements that increase the value of the property, you may include them as a medical expenses only in the amount that the expenses are not more than the increase in the value of the property." Therefore, installing electric heat and air conditioning, electrical appliances or tile floor can be a medical expense if done because it is a medical necessity.

For example, one family deducted the cost of an outdoor shed to store chemical products that could not be kept in the garage. Because of their foresight and preparation, their deduction was allowed after they were audited. They recommend that for any major changes, you get a written home appraisal, asking the appraiser to make note of special items you suggest. After the work is completed, ask for a second appraisal. Before and after pictures might also be helpful. Usually the appraiser feels that many people prefer gas heat because of the lower fuel price and prefer carpeting and drapes to hard floors and blinds, so that all additions neither add to and/or possibly subtract from the value of the house. The IRS booklet also states that "if a capitol expense qualifies as a medical expense, amounts paid for operation or upkeep also qualify as a medical expense, as long as the medical reason for the capitol expense still exists."

Many individuals prepare their own tax returns and represent themselves if audited by the IRS. However, if a lawyer or CPA prepares your tax return, they will represent you before the IRS if you should experience an audit.

Editor's note - A search of the Internal Revenue Sevice (IRS) web site did not find the above mentioned Court Decision. All references to medical expense deductions referred to Publication 502. Also, we understand that these medical type deductions can be applied to reducing Section 8 Housing rental costs

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Revised '21-Dec-2009,11:59:26'