STATEN ISLAND, N.Y. — The Internal Revenue Service (IRS) is warning the public that personal expenses including food and general wellness purchases are not deductible or reimbursable under health flexible spending or reimbursement arrangements, health savings accounts, or medical savings accounts, AL.com reported.
The question was raised after advertising indicating expenses would be covered was found to be misleading millions, the IRS noted in a bulletin, the report states.
“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.”
The report also states that some companies claim a note from a doctor can turn non-medical food, wellness, and exercise equipment into pre-taxed qualifying expenses.
However, the IRS is noting it is not true, stating if individuals claim this, it could result in an unexpected tax liability.
The IRS gave an example of an unexpected tax liability:
“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.
Those with more questions regarding any qualifying expenses are asked by the IRS 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.