Specially formulated infant food is not a deductible medical expense

Plain-English summary

A parent asked the IRS whether the cost of a specially formulated food for their infant qualifies as a medical-care expense deductible under § 213. The product delivers a specific nutrient early in life, which the parent said reduces the infant's future risk of a certain condition; it was bought on the pediatrician's recommendation but needs no prescription and is sold to the public. At the time of purchase, the healthy five-month-old had no illness. The IRS ruled the cost is not a medical expense. Food is ordinarily a personal, nondeductible expense under § 262, and § 213 only carves out a narrow exception. Under Rev. Rul. 55-261 and the case law, special food counts as medical care only when it is prescribed solely to treat an existing illness and is not part of the person's ordinary nutritional needs. Here the infant had no illness and the product has nutritional value, so it fails that test. The taxpayer, told the ruling would be adverse, asked for the adverse letter anyway. This matters because it shows the IRS treats preventive or nutritional foods as personal expenses, not deductible medical care.

Ruling snapshot

• Question: Is the cost of a specially formulated infant food, bought to reduce a future disease risk in a healthy infant, a deductible medical-care expense under § 213(d)?
• Outcome: denied (adverse ruling requested by the taxpayer)
• Key authorities: IRC §§ 213, 262; Treas. Reg. § 1.213-1(e)(1)(ii); Rev. Rul. 55-261; Rev. Rul. 2002-19

Full text (IRS public release)

    Internal Revenue Service                                    Department of the Treasury
                                                                Washington, DC 20224

    Number: 202311001                                           Third Party Communication: None
    Release Date: 3/17/2023                                     Date of Communication: Not Applicable
    Index Number: 213.00-00, 213.05-00
                                                                Person To Contact:
                                                                -------------------, ID No. -----------------
    ------------------                                          Telephone Number:
    ---------------------------------                           --------------------
    --------------------------------------                      Refer Reply To:
                                                                CC:IT&A:01
    In Re: PLR-112015-21                                        PLR-112051-21
                                                                Date:
                                                                July 15, 2022


Legend

Taxpayer                   = -------------------
Taxable Year               = ------------------------------------
Product                    = -------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
                              -------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
                              -------------------------------------------
Date 1                     = ------------------
Date 2                     = -----------------
Date 3                     = -----------------
Date 4                     = -------------------------
Date 5                     = --------------------------
Date 6                     = --------------------------
Date 7                     = -------------------------
W                          = --------------------------------------------------
X                          = -------------
Y                          = ------------------------------------------------------------

Dear ----------------:

      This letter responds to a request of Date 1 for a private letter ruling under
§ 213(d) of the Internal Revenue Code. Specifically, Taxpayer requested a
determination that the cost of Product is an expense for medical care under § 213(d).
PLR-112051-21                               2

                                        FACTS

       The Internal Revenue Service received Taxpayer’s request relating to Taxable
Year on Date 2. Taxpayer and Taxpayer’s spouse filed a joint federal income tax
return for Taxable Year on Date 3.


      Taxpayer is on the cash method of accounting and has a calendar taxable year .

       Taxpayer purchased Product during Taxable Year for Taxpayer’s infant, who, at
the time, was five months old and qualified as Taxpayer’s dependent (as defined under
§ 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof).
Product is neither medicine nor a drug but rather food. Product may be purchased on
Product manufacturer’s website and at retail stores.

        Taxpayer represents that Product is specifically formulated to be safe for an
infant’s consumption while providing the infant with a specific amount of X. Taxpayer
represents that the early introduction of X, through consumption of Product, reduces
the risk of W in the future for the infant. Taxpayer purchased Product upon the
recommendation of the infant’s doctor though Product may be purchased without a
doctor’s prescription. When Taxpayer purchased Product, the infant had no known
illness caused by W nor an imminent probability of one.

       Taxpayer did not deduct the cost of Product on Taxpayer’s joint federal income
tax return for Taxable Year.

       We advised Taxpayer’s authorized representative that we were tentatively
adverse to the ruling request. On Date 4, we held a conference of right with
Taxpayer’s representative. On Date 5, Taxpayer submitted post-adverse conference
written information. On Date 6, Taxpayer submitted additional written information. On
Date 7, we reaffirmed our adverse determination to Taxpayer’s authorized
representative. Taxpayer’s representative informed us that Taxpayer wants an
adverse ruling letter.

                                RULING REQUESTED

      Taxpayer requests a ruling that the cost of Product is an expense for medical
care under § 213 of the Code.

                                 LAW AND ANALYSIS

       Section 262(a) provides that except as otherwise provided, no deduction shall
be allowed for personal, family, or living expenses. Thus, food is ordinarily a personal
expense and nondeductible by virtue of § 262. Section 213 does not recharacterize
medical expenses as nonpersonal; it merely carves out a limited exception from § 262
for those expenses which fall within its exception. Thus. §§ 262 and 213 must be read
PLR-112051-21                                3

in conjunction to determine the deductibility of any medical expense, particularly when
the expense relates to food.

       Section 213 (a) allows a taxpayer to deduct expenses paid for medical care
during the calendar year of the taxpayer, his spouse, or a dependent (as defined under
§ 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof)
subject to the adjusted gross income percentage for the taxable year.

        Section 213 (d)(1)(A) provides that medical care includes amounts paid for the
diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of
affecting any structure or function of the body. The medical expense deduction has
historically been construed narrowly. Atkinson v. Commissioner, 44 T.C. 39, 49
(1965). Deductions for medical care have been confined strictly to expenses incurred
primarily for the prevention or alleviation of a physical or mental defect or illness.
Section 1.213-1(e)(1)(ii) of the Income Tax Regulations.

        Revenue Ruling 55-261, 1955-1 C.B. 307, holds, in part, that generally, the cost
of special food does not qualify as a medical expense. However, in special cases,
depending upon the particular facts presented, if the prescribed food is taken solely for
the alleviation or treatment of an illness, is in no way a part of the nutritional needs of
the patient, and a statement as to the particular facts and to the food prescribed is
submitted by a physician, the cost of such food may be deducted as a medical
expense. Revenue Ruing 55-261 does not support a favorable ruling on Taxpayer’s
facts because the infant did not have an illness, and the Product has nutritional value
apart from its represented benefits in preventing W.

        Revenue. Ruling 55-261 is in accord with the case law addressing food as a
medical expense. The Tax Court has held that the additional costs of obtaining
medically required foods that alleviate an existing medical condition are deductible as
expenditures for medical care. Randolph v. Commissioner, 67 T.C. 481, 488 (1976)
(citing Cohen v. Commissioner, 88 T.C. 387 (1962)); Von Kalb v. Commissioner, T.C.
Memo.1978–366, acq. in result only, 1979-66 (Feb. 27, 1979). However, the costs of
foods that meet the normal dietary needs of an individual are not deductible medical
expenses. Harris v. Commissioner, 46 T.C. 672, 673 (1966); Estate of Webb v.
Commissioner, 30 T.C. 1202, 1213–1214 (1958); Massa v. Commissioner, T.C. Memo
1999-63, aff’d without published opinion 208 F. 3d 226 (10th Cir. 2000); Collins v.
Commissioner, T.C. Memo.1965–233. See also, Rev. Rul. 2002-19, 2002-16 I.R.B.
778 (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 foods
the individual would normally consume to satisfy nutritional requirements). Revenue
Ruling. 2002-19 cites to, and restates, the holding of Rev. Rul. 55-261.

       In cases holding that the cost of a special diet is deductible under § 213, the
deductible amount is limited to the excess of the cost of the special diet over the cost of
a normal diet. Nehus v. Commissioner, T.C. Memo.1994–631, aff’d. without published
opinion 108 F.3d 338 (9th Cir.1997); Crawford v. Commissioner, T.C. Memo.1993-192.
PLR-112051-21                                4

Specifically, the excess cost of specially prepared foods designed to treat a medical
condition over the cost of ordinary foods which would have been consumed but for the
condition is an expense for medical care. Randolph, 67 T.C. at 489; Cohn v.
Commissioner, 38 T.C. 387, 391 (1962); Von Kalb v. Commissioner, T.C. Memo. 1978-

366. A taxpayer must prove what the taxpayer spent for the special diet and what the
taxpayer would spend for food to satisfy normal nutritional needs. Flemming v.
Commissioner, T.C. Memo. 1980-583.

                                     CONCLUSION

      Based on the facts and representations submitted, we conclude the cost of
Product is not an expense for medical care under § 213 of the Code.

       The ruling contained in this letter is based on information and representations
submitted by Taxpayer and accompanied by a penalty of perjury statement executed
by an appropriate party. While this office has not verified any of the material submitted
in support of the request for the ruling, it is subject to verification on examination.

       A copy of this letter must be attached to any income tax return to which it is
relevant. Alternatively, taxpayers filing their returns electronically may satisfy this
requirement by attaching a statement to their return that provides the date and control
number of the letter ruling.

       Except as expressly provided herein, no opinion is expressed or implied
concerning the tax consequences of any aspect of any transaction or item discussed or
referenced in this letter.

      This ruling is directed only to the Taxpayer requesting it. Section 6110(k)(3)
provides that it may not be used or cited as precedent.

In accordance with the provisions of the power of attorney currently on file with
this office, a copy of this letter is being sent to your authorized representative. We are
also sending a copy of this letter to the appropriate operating division director.

                                                 Sincerely,

                                                   /s/

                                                 ----------------------------------------------------
                                                 Office of the Associate Chief Counsel
                                                 (Income Tax & Accounting)
Enclosure:


 For § 6110 Purposes
PLR-112051-21                                          5



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