Discussion:Legal Medical Expenses

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Discussion Forum Index --> Tax Questions --> Legal Medical Expenses


Mickash (talk|edits) said:

18 August 2010
My client is being audited and legal expenses they deducted under medical are being disallowed. The legal expenses were incurred in relationship to their decision to remove their autistic and otherwise disabled child from the private school he was attending and return to the school district. The school district would not offer a placement from 2005 to 2007. In 2007, the school district rendered their decision and offered a placement after the parents hired an attorney and initiated an OAH hearing (California). In the interim their son did not have an educational placement so they enrolled him in an alternate private school for disabled children in which he received speech, OT, social therapies. They deducted the legal fees incurred, private schooling, medical mileage for from and to the school. It is all being disallowed as well as the private aides they hired based on the recommendation of their son's psychologist and who also received training from an ABA Autistic Therapy provider. My clients presented evidence that school was recommended by their son's psychologist and the aides were recommended and trained by the ABA agency providing other therapies. My clients also provided proof that the school provided only S.E. services, educational but primarily speech, OT, social therapies. For the legal I found a 1998 case disallowing the legal expenses. My client is telling me that the autistic parent forum that they belong to states otherwise. I would appreciate anyone's experience with a relative experience.

Tax Writer (talk|edits) said:

18 August 2010
There are special exceptions in the law for disabled children/ disabled dependents.

According to the last census figures, one of out every 12 children and teenagers—more than five million—has a physical or mental disability. [1]

Lots of very good cites in the above article, including a client letter for the special needs child.

I will look for more cites, because this subject is dear to my heart.

Autism is one of the most horrifying things that a parent has to deal with; worse than a terminal illness because the child can live on indefinitely in this state. I don't know the whole story, but I think your auditor is a complete jackass. The IRS better get used to these hardship cases because this disease is an epidemic and I wouldn't wish it on my worst enemy.

In any case, if you push it, I doubt this case will ever go past appeals. I almost wish it would, though, because I would love to see a judge give the IRS a smack-down on this issue, Vinatieri-style. [2]

If all the expenses are as you say, then I wouldn't concede any of it.

R2 (talk|edits) said:

18 August 2010
Legal expenses are generally not deductible as medical expenses.

However, if there are legal barriers to receiving medical care, the legal costs may be deductible. See Gerstacker v. Commissioner, 414 F.2d 448 (6th Cir. 1969).

I believe that Rev Ruling 78-266 also applies here.

I don't believe that the 1998 case applies here (See TC Memo 1998-85) since in that case, the taxpayer's son was already enrolled in the special school at the time the lawsuit was filed.

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