IRS issues warning to people filing taxes

IRS issues warning to people filing taxes

The Internal Revenue Service has a warning that expenditures for general health and wellness aren’t considered medical expenses, regardless of some advertising claims to the contrary.

In a bulletin issued “amid concerns about people being misled,” the IRS said personal expenses – things like food and general wellness purchases – are not deductible or reimbursable under health flexible spending or reimbursement arrangements, health savings accounts, or medical savings accounts.

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The warning comes after what the IRS said were “aggressive marketing” campaigns that appeared to indicate such expenses were covered.

“Legitimate medical expenses have an important place in the tax law that allows for reimbursements,” IRS Commissioner Danny Werfel said in a statement. “But taxpayers should be careful to follow the rules amid some aggressive marketing that suggests personal expenditures on things like food for weight loss qualify for reimbursement when they don’t qualify as medical expenses.”

Some companies mistakenly claim a note from a doctor can turn non-medical food, wellness and exercise equipment into qualifying expenses. That’s not true and claiming those things could result in an unexpected tax liability.

The IRS offered the following example:

“A diabetic, in his attempts to control his blood sugar, decides to eat foods that are lower in carbohydrates. He sees an advertisement from a company stating that he can use pre-tax dollars from his FSA to purchase healthy food if he contacts that company. He contacts the company, who tells him that for a fee, the company will provide him with a ‘doctor’s note’ that he can submit to his FSA to be reimbursed for the cost of food purchased in his attempt to eat healthier. However, when he submits the expense with the ‘doctor’s note’, the claim is denied because food is not a medical expense and plan administrators are wary of claims that could invalidate their plans.”

The IRS encouraged people with questions regarding qualifying expenses to review frequently asked questions on medical expenses related to nutrition, wellness and general health to determine whether a food or wellness and whether the item is a qualified medical expense.