IRS to Mastectomy Moms: No Tax Relief for Baby Formula

[Chowdahead]

I'm going to guess that the Treasury Secretary will be getting a call from the White House on these "interpretations", whose logic I find baffling, especially since "formula supplements" are allowed.

http://blog.newsweek.com/blogs/thehumancon...by-formula.aspx

IRS to Mastectomy Moms: No Tax Relief for Baby Formula

Newsweek

By Jenny Hontz

The IRS has ruled that a woman medically incapable of breast-feeding after a double mastectomy may not set aside the cost of infant formula as a pretax medical expense, NEWSWEEK has learned exclusively.

“To explicitly deny women this deduction is a shameful interpretation of their regulations, especially when they’re interpreting them to accommodate footpads and condoms and Viagra,” says Dan Harrison, 39, of Los Angeles, who asked for the IRS to rule on the issue. “I think women should be pissed off.”

Harrison’s wife, Libby, 39, had both breasts surgically removed in 2006, two years before the birth of her second daughter, Hannah. While Libby breast-fed her first child, she had no choice but to purchase infant formula for Hannah, which cost about $1,000 over the course of a year.

Dan Harrison, an executive at NBC Universal, was looking through a list of approved medical expenses under his flexible spending account provided by Ceridian, the company that manages his employee benefits. Flexible spending accounts allow taxpayers to set aside up to $5,000 per year as pretax income for medical expenses not covered by insurance.

Dr. Scholl’s footpads, sunscreen, birth control, and prescription sunglasses all qualify as medical care for the “diagnosis, cure, mitigation, treatment or prevention of disease,” according to the IRS. People with hearing impairments are allowed to include the cost of equipment to help them watch TV, and anyone who has lost a limb can count the cost of modifying a car as pretax income. Hypnosis, yoga, colon cleansing, massage, and even dancing lessons are also considered medical costs with a doctor’s note. However, infant formula for women medically unable to breast-feed because of breast cancer or HIV is nowhere on the list.

Harrison wrote to the IRS asking for clarification, and he received a letter last September confirming his suspicions that formula under no circumstances is considered a medical expense. “Food, including infant formula, that satisfies your nutritional requirements is a personal expenditure,” the letter said. Harrison saw a double standard at work. Breast-milk supplements are considered a medical expense with a doctor’s note, as are breast pumps and hot and cold packs to ease breast-feeding pain. Patients allergic to wheat may also count as a medical expense the difference between the cost of wheat-free and regular foods.

“This special food is deductible with a doctor’s certification,” Harrison says. “How is infant formula any different?”

The IRS had never considered a case of a woman who had to purchase formula because of a double mastectomy, and Harrison believed a principle of fairness was at stake. He challenged the IRS by requesting a formal ruling and traveling to Washington to make his case last November.

Former California governor Gray Davis, a family friend, put Harrison in touch with Rep. Henry Waxman, who wrote a letter to the IRS supporting the Harrisons. The breast-cancer survivor organization Susan G. Komen for the Cure, also urged the IRS to reconsider, and the law firm Kirkland & Ellis took the case pro bono, putting one of its top tax attorneys, Todd Maynes, on the job. Despite having such heavy hitters in his corner, the IRS ruled July 1 against the Harrisons, saying infant formula is food, and because it’s for the baby, it doesn’t mitigate the disease of the mother. The Harrisons received the decision in the mail this week.

“It’s food for a healthy infant,” IRS branch chief Christopher Kane told Newsweek.com. “The mother is the one with the medical problem. It’s the same expense a [healthy] woman who chooses not to breast-feed incurs,” Kane said.

That argument doesn’t sit well with Harrison. Buying infant formula was not a choice for his family. Without it, his child could not have survived.

“There’s no doubt, if you don’t have breast tissue, you can’t breast-feed,” he says. “There is no alternate product to give the baby. It’s not like the baby can eat a granola bar and get developmental nutrition from a prescription product, which would be deductible. It’s breast milk or formula or the kid dies.”

Harrison also takes issue with the idea that formula is merely food. “Infant formula is so highly regulated, in my mind, it’s closer to a medicine,” he sasys. “They tell you what ingredients must be in infant formula [and in what amounts]. There’s a real care that goes into the manufacture and oversight that you don’t have in the traditional food chain.”

To Kane’s assertion that formula doesn’t mitigate the mother’s disease because it’s for her child, Harrison points out that the health of mothers and young infants is intertwined. “This has a lot of support in medical literature and even in government hospital regulations,” he says. “It is called the mother-child dyad.”

The tax code, however, treats mothers and infants as separate people, Kane says. “We’re constrained by the law. That’s our job.”

Harrison isn’t giving up. He’s taking his case to Congress and has a receptive ear in Rep. Debbie Wasserman Schultz (D-Fla.), herself a breast-cancer survivor. "This ruling clearly shows a lack of understanding of the medical implications of breast-cancer treatment in young women," Wasserman Schultz says. "I am exploring options that will allow women adversely affected by this ruling to utilize the money they've set aside in their FSA accounts for what is clearly a medically necessary expense."

[kcjenkins]

Well, while I think the IRS has some reasonable logic to their decision, as long as they allow deductions for Viagra, they will never hold the 'high ground'. Of course, if this is allowed for moms wiho have had a mastectomy, why not also for moms who just have not got enough breast milk? Impossible to determine who is and is not qualified. The only practical way to administer would be to make all baby formula deductible, seems to me.

[jainen]

>>make all baby formula deductible<<

Many people have special dietary needs, often related to prior surgery. Should all low salt foods be deductible? Sugar free? Regardless of the mother's condition, the formula is for the child who presumably has no unusual medical conditions. There are multiple sources of food, and even multiple sources of mother's milk.

Can anybody explain to me how deductions for condoms or viagra have anything at all to do with the discussion of breast feeding?

[JohnH]

>>make all baby formula deductible<<

Many people have special dietary needs, often related to prior surgery. Should all low salt foods be deductible? Sugar free? Regardless of the mother's condition, the formula is for the child who presumably has no unusual medical conditions. There are multiple sources of food, and even multiple sources of mother's milk.

Can anybody explain to me how deductions for condoms or viagra have anything at all to do with the discussion of breast feeding?

Probably not much of a connection to breast feeding, but there is a general connection to what the government is doing to us through the tax system.

[jainen]

>>what the government is doing to us through the tax system<<

I think it's more about what the news magazine industry is doing to us. A story like this tugs our emotions in several ways, but really the IRS has more difficult issues than diet for a healthy baby.