Posted by Howard Kass, CPA

In my previous article on the tax consequences of following a Gluten-Free diet (The Celiac Tax Deduction; What’s New?), I discussed the law affecting the tax treatment of following a Gluten-Free diet, as it existed in March 2011.

Fast-forward to September 2011.  Within the past few days, the IRS released a letter that was written in response to a request that was sent to Commissioner Douglas Shulman to revise the published guidance clarifying the tax treatment of special foods purchased to treat an unnamed condition.

In that letter from the Office of the Chief Counsel, there is a very thorough discussion of the underlying law surrounding the deductibility of special foods, as well as when the purchase of certain special foods is not deductible.

The letter goes on to cite specific Revenue Rulings and court cases, as well, concluding that “if a taxpayer can establish the medical purpose of the diet, such as through a physician’s diagnosis, then to the extent the cost of the food for the special diet exceeds the cost of the food that satisfies a taxpayer’s normal nutritional needs if the special diet were not required, the excess cost is an expense for medical care under section 213(d)”.  The letter concluded by saying that they would consider modifying the language in Publication 502, Medical and Dental Expenses, to reflect that clarified information.

In short, there is now official guidance from the IRS on the deductibility of the additional costs incurred in adhering to a medically required diet.  This is just what the doctor ordered for the Celiac community.

For answers to questions on this topic, please contact hkass@zinnerco.com.