Deducting Running Shoes As Medical Expense

It is my interpretation of CONEX-123056-10 (attached) that reasonable running expenses would qualify for FSA and MSA deductions (say under $500/year) provided the tax payer:

1. has a written prescription for running or walking to treat hypertension, diabetes, or breast cancer,
2. written receipts for shoes specifically designed for running, race participation fees, and running club membership fees.
3. a written or electronic log of running mileage that is compenserate with shoe purchases (a minimum of 300 miles/shoe).
4. would not run if it were not for the medical diagnosis (i.e., running is specifically to treat the condition).

However, I would also interpret the last paragraph of CONEX-123056-10 as stating:

That a written physician diagnosis for hypertension, diabetes, or breast cancer, may be sufficient since running and walking have been shown to be effect medical treatment for these conditions
(http://www.ncbi.nlm.nih.gov/pubmed/24470442 and http://www.ncbi.nlm.nih.gov/pubmed/24968127/ and http://www.ncbi.nlm.nih.gov/pmc/articles/PMC4090350/

The argument for wanting a physician diagnosis for hypertension, diabetes, or breast cancer, to be sufficient is that physicians routinely diagnose hypertension, diabetes, or breast cancer, but are not expert in the tax code.

Advice on whether this interpretation of the tax code is correct and how to establish this as accepted policy would be much appreciated.

Thank you

Paul Williams, PhD

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Number: 2010-0175 Release Date: 9/24/2010
CONEX-123056-10
UILC: 213.00-00
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Dear ----------------------:
I am responding to your inquiry dated November 18, 2009. You asked about introducing legislation that would allow gym fees as deductible medical expenses. You referred to Publication 502, Medical and Dental Expense, which excludes from medical expenses “health club dues paid to improve one’s general health or to relieve physical or mental discomfort not related to a particular medical condition.”
Taxpayers can deduct expenses paid for medical care of the taxpayer, spouse, or dependent, to the extent the expenses exceed 7.5 percent of adjusted gross income (section 213(a) of the Internal Revenue Code (the Code)). Medical care refers to amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting a structure or function of the body (section 213(d)(1)(A) of the Code).
The law limits deductions for medical care to expenses paid 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). An expense qualifies as medical care as preventing disease only if a present existence or an imminent probability of developing a disease, physical or mental defect, or illness exists (Daniels v. Commissioner, 41 T.C. 324 (1963); Stringham v. Commissioner, 12 T.C. 580 (1949)).
Taxpayers cannot deduct personal, family, or living expenses as medical care if the expenses do not fall within the section 213 definition (section 262 of the Code and section 1.213-1(e)(1)(vi) of the Income Tax Regulations). An expenditure that is merely beneficial to the general health of an individual is personal and is not for medical care (section 1.213-1(e)(1)(ii) of the Income Tax Regulations).
CONEX-123056-10 2
A taxpayer who claims that an expense of a peculiarly personal nature is primarily for medical care must establish that fact. Objective factors that indicate that an otherwise personal expense is for medical care include:
• The taxpayer’s motive or purpose for making the expenditure • A physician’s diagnosis of a medical condition and recommendation of the item
as treatment or mitigation
• The relationship between the treatment and the illness
• The treatment’s effectiveness
• The proximity in time to the onset or recurrence of a disease (Havey v. Commissioner, 12 T.C. 409 (1949)).
The taxpayer must establish that he or she would not have paid the expense but for the disease or illness. A taxpayer cannot deduct a personal expense as medical care if he or she would have paid the expense in the absence of a medical condition (Commissioner v. Jacobs, 62 T.C. 813 (1974)).
Fees that an individual pays to health institutes where the taxpayer exercises are personal expenses but may be deductible as medical expenses only when a physician prescribes the treatments and provides a statement that the treatments are necessary for the alleviation of a physical or mental defect or illness of the individual receiving the treatments (Revenue Ruling 55-261, 1955-1 C.B. 307).
In addition, a taxpayer who participates in a weight loss program to improve his or her appearance, general health, and sense of well being, and not for the purpose of curing any specific ailment or disease, is not a medical expense (Revenue Ruling 79-151, 1979-1 C.B. 116).
Uncompensated amounts an individual pays for participation in a weight loss program as treatment for a specific disease, such as obesity or hypertension, that a physician has diagnosed are expenses for medical care that a taxpayer can deduct (Revenue Ruling 2002-19, 2002-16 C.B. 778).
CONEX-123056-10 3
A taxpayer cannot deduct costs associated with using a gym to improve general health and well-being and not to cure a specific disease or ailment. A taxpayer may be able to deduct the gym fees as a medical expense if the taxpayer can establish that:
• • •
A physician diagnosed the taxpayer with a specific disease
The taxpayer uses the gym to treat the specific disease
The taxpayer would not incur the gym fees but for the specific disease
The IRS administers the tax law as enacted. Any change in the law would require legislative action by the Congress. I hope this information is helpful. If you have any questions, please contact ------------, Identification Number ----------, at -----------------------.
Sincerely,
Thomas D. Moffitt Chief, Branch 2 Office of Associate Chief Counsel (Income Tax & Accounting)

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A taxpayer is likely to lose a battle with the IRS over this deduction. Running shoes are clothing apparel that can be worn for all kinds of occaisions and is not something only used for exercise. Swimsuits similarly are used in a variety of situations and not just for doing laps in the pool. Where clothing may be worn for a purpose other than a purpose that is deductible under the Code (e.g. suitable for everday or recreational wear, etc) generally the deduction is not allowed. Instead, to be deductible the clothing must be such that it is suitable for use only for the deductible purpose and not for general wear or other purposes. The Tax Court noted this in a case opinion by the well respected Judge Tannenwald:

Petitioners also deducted the cost of two pairs of ordinary pajamas purchased for Frances Montgomery to wear to therapy treatment following the removal of the cases. On the record before us, we cannot say that these items were adapted only for use during such treatment. Consequently, the expense was not an amount paid for the ‘diagnosis, cure, mitigation, treatment, or prevention of disease’ as those terms are used in section 213(e)(1)(A). See Rev.Rul. 55-261, 1955-1 C.B. 307.

Montgomery v. Comm'r of Internal Revenue, 51 T.C. 410, 415 (1968)(underlining added).

Even if the clothing was usuable only for the deductible medical purpose and not general wear, a diagnosis of a particular condition (e.g. breast cancer) by itself certainly wouldn’t be enough. The activity of running and the requirement for the particular shoes to do it would need to be prescribed as well. And, as noted above the taxpayer would have to be able to convince the IRS that the shoes are suitable only for that prescribed exercise. Finally, the taxpayer would need to show that the exercise would not have been done without the prescription, i.e. the taxpayer would not have done it simply to maintain good health and fitness.

Thank you for the response. Tracking devices are available that can record on a daily basis the distance run and even the specific course. The recognized replacement interval for shoes is 300 to 500 miles per pair. Thus, could one argue that x-pairs of shoes could be reasonably ascribed to the running activity per year based on an electronic record of the distance run (1500 miles=3 pairs?). Does clothing differ from other duel-use tax deductions? Thanks

I administer employer benefits including FSA and HSAs,

Don't even try this. It will be thrown out so fast you won't even have time to pull your hand back. Tax has already explained to you why. The fact that you can track your distance and activity does not make it a medical expense that is acceptable under an FSA.

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Quoting ptwilliams

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Thank you for the response. Tracking devices are available that can record on a daily basis the distance run and even the specific course. The recognized replacement interval for shoes is 300 to 500 miles per pair. Thus, could one argue that x-pairs of shoes could be reasonably ascribed to the running activity per year based on an electronic record of the distance run (1500 miles=3 pairs?).

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Presumably you are trying to set up the argument that the shoes were used only for the prescribed running activity by asserting that if he or she ran 1500 miles for the prescribed exercise that it must mean 3 pairs of shoes were used only for that purpose. The argument is flawed, however, because it only shows what miles were run. It does not show what shoes were worn while doing that running and, importantly, it does not prove that the shoes were not worn for any other use. This problem is exactly why the standard is set up the way it is as I described in my earlier reply.

There are several elements to qualify for the deduction when it comes to clothing, as I described earlier. The problem you have remains that the shoes are not just suitable for the claimed medical use. They are also usuable for other purposes. The standard is rigorous here because the potential for abuse is very high. Other taxpayers don’t want to subsidize your personal living expenses (food, clothing, shelter, etc) via tax deductions, and the temptation here would be strong to try to sneak in deductions for clothing either as medical deductions or for business expense deductions that the taxpayer wanted to also use for general use. Clothing is particularly difficult because it is really impossible to prove that the taxpayer didn’t wear the clothes for some purpose other than the purpose that qualifies for the deduction. Your tracking idea doesn’t solve that problem.

The bottom line is that this deduction isn’t going to work.

By the way, even if it did work, I think you’d have trouble getting the IRS to bite on the idea that $500 for one pair of shoes is necessary. You can find good running shoes for much less. Certainly I’m skeptical. This strikes me as an attempt to get a deduction in for expensive fashion running shoes, not simply shoes necessary for exercise.

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Quoting ptwilliams

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Does clothing differ from other duel-use tax deductions?

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I assume you meant “dual use tax deductions” but even so, I don’t what you mean by that phrase.

Thanks for your responses.
Let me begin that I am not trying to find a way to save taxes on my own running shoes, but rather trying to understand for the athletic industry the obstacles need to be overcome to qualify shoes and other running expenditures.
1. The links provided above prove that running expenses qualify as "the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body.”
2. By dual-use, I mean that the object being deducted (shoes) can be used for the medical treatment of the disease (covered) or walking about (non covered).
3. In the case of an automobile use as a business deduction, the IRS requires that written records be maintained as proof that it was business related.
4. In the case of running, various smart phone applications can record the distance run and the course on a daily basis. If a person is a runner, then almost certainly the person ran in a running shoe. There is 300 to 500 miles of "running life" in a pair of running shoes, so is it reasonable to assume, that the runner went through 2 to 3 pairs of shoes if they ran 1000 miles in a year.
5. In the case of Montgomery v. Comm'r of Internal Revenue, the claim were ordinary pajamas, as opposed to specialty pajamas for the medical treatment. In contrast, running shoes are specifically designed to prevent injury while running and to facilitate the treatment.
5. The maximum health benefit of running is probably 30 miles/year, so the maximum write-off could be set at 4 pair at $125/pair.
6. This is less expensive than a gym membership ($100/month), and to my knowledge, a gym membership has not been shown to reduce disease risk.
So may questions are: What is the CONEX cited above? Does it have some sort of a legal standing?
What will be the process of getting running shoes accepted as an FSA if: 1) the person is diagnosed with a disease, 2) claims to have begun running to treat that disease, 3) has a written or electronic record of the distance run? 4) shoe receipts compenserate with the reported distance run?
Is it an appeal process?

I very much appreciate the time taken by the two respondents, I m trying to get a deeper understanding of the issue and any direction would be much appreciated. Other suggested forums for their thoughts would be appreciated as well.

Some strange stuff somerimes get thru or simply does not,get challanged....but would think running shoes ..which are suitable for just about anything,including walking to work or at a mall have about ZERO odds ...now if you were a professional runner or athelete and these were special cleated shoes not suitable for much but your playing field..that may be different..but it's not,what you post.

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Quoting ptwilliams

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Thanks for your responses.
3. In the case of an automobile use as a business deduction, the IRS requires that written records be maintained as proof that it was business related.

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Automobiles are a very different kind of situation. While there is potential for abuse with those deductions, too, Congress, the IRS, and the courts have decided that the abuses can be reasonably policed with the detailed documentation requirements that have been created for automobile deductions. The thing with cars is that each one has an odometer that makes it possible to track the total miles traveled with the vehicle, and with proper documentation it is possible to determine which miles were driven for business or medical purposes. Clothing doesn't have an odometer and moreover clothing can be worn a lot for casual use without racking up a lot of miles. One doesn't typically spend much time in a car just sitting in it. It therefore becomes impossible to really pin down what use is really made of clothing like shoes. For that reason, the law has developed a separate standard when it comes to deducting clothing. Unless it is something that is only really usuable for the deductible purpose (e.g. to treat a particular condition) it won’t be deductible. Running shoes while perhaps designed primarily for running are also perfectly usuable for everyday wear. Millions of people including myself use running shoes exactly that way: as casual everyday footwear. And that is what prevents the deduction you seek in this case.

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Quoting ptwilliams

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6. This is less expensive than a gym membership ($100/month), and to my knowledge, a gym membership has not been shown to reduce disease risk.

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It does not matter that the shoes may be less expensive than a gym membership. The standard for deductiblity does not turn on whether it is cheaper than some other alternative that might achieve the same thing in the end.

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Quoting ptwilliams

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So may questions are: What is the CONEX cited above? Does it have some sort of a legal standing?

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CONEX is simply an abbrievation for congressional correspondence. It is simply a letter from an attorney in the IRS National Office to a member of Congress responding to the member’s request for explanation of the tax law or for assistance with a problem that a member’s constitutent has with the tax law. It is not law and cannot be cited as authority in court. It simply reflects the view and analysis of that IRS attorney. The problem is that while the letter does accurately state the general rules for medical expense deductions, it does not delve into specifics for particular deductions. It does not discuss deduction of clothing at all. One needs to do further research for that. The case I cited earlier is the standard that still today applies for clothing deductions. You can find a number of other cases, particularly in the employee business expense area, that state this same standard for deduction of clothing expenses.

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Quoting ptwilliams

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What will be the process of getting running shoes accepted as an FSA if: 1) the person is diagnosed with a disease, 2) claims to have begun running to treat that disease, 3) has a written or electronic record of the distance run? 4) shoe receipts compenserate with the reported distance run? Is it an appeal process?

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Field Service Advice (FSA) is advice issued by a national office attorney to a field office attorney, IRS agent or officer. The FSA starts with a request by the IRS field attorney, agent, or officer asking the national office for advice on a legal issue. It most commonly comes up during the audit of a taxpayer. In that case, if the FSA request is accepted, the IRS national office attorney will want to get the set of facts that apply to the particular case in question, hopefully a statement that is agreed upon by the IRS field office and the taxpayer. The FSA that is issued is not legal precedent; it does not make law. It is again only the view of the national office attorney who provides the advice.

You keep arguing that use of tracking makes the deduction work. But under present case law, it doesn’t. It might provide an argument to support changing the law. If you want to make it possible to get a deduction for this, convince the IRS and Treasury to issue regulations accepting tracking as way to determine what is deductible or get Congress to change the law to expressly adopt the standard you want. A FSA won't change the prevailing case law.

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Quoting ptwilliams

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I very much appreciate the time taken by the two respondents, I m trying to get a deeper understanding of the issue and any direction would be much appreciated.

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If that's what you really want then pay attention to what the tax attorney is telling you. These loony gimmicks will not work. Period.

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Quoting ptwilliams

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Other suggested forums for their thoughts would be appreciated as well.

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Two other forums come to mind.

1 - The IRS itself.
2 - A tax attorney that you hire and pay for proper tax advice.

I would also like to point out that medical expense deductions are now limited to the amount that exceeds 10% of adjusted gross income. Therefore, for most people, this issue would end up being a moot point anyway.