Consulting assistance on medical bills as a medical deduction?

[AES]

I recently attended an Emeriti Council meeting at my
university at which numerous emeritus faculty members (most
of them still totally savvy intellectually, some of them MDs
themselves) recounted horror story after horror story of
confusing, confused, grossly incorrect, invalid,
uninterpretable, or totally unjustified billings for medical
care; correspondingly incorrect or incompetent processing of
and decisions about these bills by private and government
insurance payors and benefits plans; and almost total
inability to get useful assistance in dealing with these
organizations -- in short, all the other usual consequences
of dealing with the U.S. health care system.

A senior human resources/staff benefits professional from
our university participating in the meeting noted that the
error rate for medical billings is commonly estimated to be
in the range of 30% of all transactions involved.

I just signed a $495 check for services provided over the
past few months by a professional accountant whose primary
role is as a specialist and consulting in sorting out these
problems. When we first approached her for help, she said
in essence "Just bring in the whole proverbial 'shoebox'
full of confusing and uninterpretable documents resulting
from your wife's recent two-year-long medical adventure [it
was really more like a banker's box than a shoebox in our
case]; don't bother trying to sort anything out; I'll do
that, tell you what bills you still have to pay, file the
claims for those you don't, and do the paperwork to recover
the payments you shouldn't have made." She did so, and has
been more than worth her services.

I'm planning on deducting her fee as a *medical* expense --
right?

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<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
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<< to this newsgroup as well as our anti-spamming policy >>
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[Harlan Lunsford]

I recently attended an Emeriti Council meeting at my
university at which numerous emeritus faculty members (most
of them still totally savvy intellectually, some of them MDs
themselves) recounted horror story after horror story of
confusing, confused, grossly incorrect, invalid,
uninterpretable, or totally unjustified billings for medical
care; correspondingly incorrect or incompetent processing of
and decisions about these bills by private and government
insurance payors and benefits plans; and almost total
inability to get useful assistance in dealing with these
organizations -- in short, all the other usual consequences
of dealing with the U.S. health care system.

A senior human resources/staff benefits professional from
our university participating in the meeting noted that the
error rate for medical billings is commonly estimated to be
in the range of 30% of all transactions involved.

I just signed a $495 check for services provided over the
past few months by a professional accountant whose primary
role is as a specialist and consulting in sorting out these
problems. When we first approached her for help, she said
in essence "Just bring in the whole proverbial 'shoebox'
full of confusing and uninterpretable documents resulting
from your wife's recent two-year-long medical adventure [it
was really more like a banker's box than a shoebox in our
case]; don't bother trying to sort anything out; I'll do
that, tell you what bills you still have to pay, file the
claims for those you don't, and do the paperwork to recover
the payments you shouldn't have made." She did so, and has
been more than worth her services.

I'm planning on deducting her fee as a *medical* expense --
right?

I don't think so. See IRS publication 502, somewhere about
page 9, under legal fees. In short, these are not medical
expenses.

ChEAr$,
Harlan Lunsford, EA n LA

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

 

[Paul Thomas]

I recently attended an Emeriti Council meeting at my
university at which numerous emeritus faculty members (most
of them still totally savvy intellectually, some of them MDs
themselves) recounted horror story after horror story of
confusing, confused, grossly incorrect, invalid,
uninterpretable, or totally unjustified billings for medical
care; correspondingly incorrect or incompetent processing of
and decisions about these bills by private and government
insurance payors and benefits plans; and almost total
inability to get useful assistance in dealing with these
organizations -- in short, all the other usual consequences
of dealing with the U.S. health care system.

A senior human resources/staff benefits professional from
our university participating in the meeting noted that the
error rate for medical billings is commonly estimated to be
in the range of 30% of all transactions involved.

I just signed a $495 check for services provided over the
past few months by a professional accountant whose primary
role is as a specialist and consulting in sorting out these
problems. When we first approached her for help, she said
in essence "Just bring in the whole proverbial 'shoebox'
full of confusing and uninterpretable documents resulting
from your wife's recent two-year-long medical adventure [it
was really more like a banker's box than a shoebox in our
case]; don't bother trying to sort anything out; I'll do
that, tell you what bills you still have to pay, file the
claims for those you don't, and do the paperwork to recover
the payments you shouldn't have made." She did so, and has
been more than worth her services.

I'm planning on deducting her fee as a *medical* expense --
right?

If that's your plan.......

But I see it as a personal accounting expense, not a payment
for a qualified medical service or product.

--
Paul A. Thomas, CPA
Athens, Georgia

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

 

[San Diego CPA]

I recently attended an Emeriti Council meeting at my
university at which numerous emeritus faculty members (most
of them still totally savvy intellectually, some of them MDs
themselves) recounted horror story after horror story of
confusing, confused, grossly incorrect, invalid,
uninterpretable, or totally unjustified billings for medical
care; correspondingly incorrect or incompetent processing of
and decisions about these bills by private and government
insurance payors and benefits plans; and almost total
inability to get useful assistance in dealing with these
organizations -- in short, all the other usual consequences
of dealing with the U.S. health care system.

A senior human resources/staff benefits professional from
our university participating in the meeting noted that the
error rate for medical billings is commonly estimated to be
in the range of 30% of all transactions involved.

I just signed a $495 check for services provided over the
past few months by a professional accountant whose primary
role is as a specialist and consulting in sorting out these
problems. When we first approached her for help, she said
in essence "Just bring in the whole proverbial 'shoebox'
full of confusing and uninterpretable documents resulting
from your wife's recent two-year-long medical adventure [it
was really more like a banker's box than a shoebox in our
case]; don't bother trying to sort anything out; I'll do
that, tell you what bills you still have to pay, file the
claims for those you don't, and do the paperwork to recover
the payments you shouldn't have made." She did so, and has
been more than worth her services.

I'm planning on deducting her fee as a *medical* expense --
right?

This expense is clearly not a medical expense, however, I
would agree with deducting as a Misc Itemized Deduction
subject to 2% of AGI. These expenses are clearly related to
preservation of income producing property (i.e., preserving
investable assets by preventing unnecessary overpayment of
medical expenses). Depending in level of income, expenses
in question, AMT issues and the like, the taxpayer will
probably get no real tax benefit, but I think this is the
most appropriate treatment.

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

 

[Dick Adams]

I recently attended an Emeriti Council meeting at my
university at which numerous emeritus faculty members (most
of them still totally savvy intellectually, some of them MDs
themselves) recounted horror story after horror story of
confusing, confused, grossly incorrect, invalid,
uninterpretable, or totally unjustified billings for medical
care; correspondingly incorrect or incompetent processing of
and decisions about these bills by private and government
insurance payors and benefits plans; and almost total
inability to get useful assistance in dealing with these
organizations -- in short, all the other usual consequences
of dealing with the U.S. health care system.

A senior human resources/staff benefits professional from
our university participating in the meeting noted that the
error rate for medical billings is commonly estimated to be
in the range of 30% of all transactions involved.

I just signed a $495 check for services provided over the
past few months by a professional accountant whose primary
role is as a specialist and consulting in sorting out these
problems. When we first approached her for help, she said
in essence "Just bring in the whole proverbial 'shoebox'
full of confusing and uninterpretable documents resulting
from your wife's recent two-year-long medical adventure [it
was really more like a banker's box than a shoebox in our
case]; don't bother trying to sort anything out; I'll do
that, tell you what bills you still have to pay, file the
claims for those you don't, and do the paperwork to recover
the payments you shouldn't have made." She did so, and has
been more than worth her services.

I'm planning on deducting her fee as a *medical* expense --
right?

Unless your out of pocket medical expenses were high enough
to exceed 7.5% of your AGI, a medical deduction would be
meaningless as well as inappropriate. If your miscellaneous
itemized deductions exceed 2% of your AGI, put it there.

It is NOT a medical expense, but you can argue it is a
medical-related expense. See if your health care spending
account will cover it.

Dick

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

 

[Harlan Lunsford]

I recently attended an Emeriti Council meeting at my
university at which numerous emeritus faculty members (most
of them still totally savvy intellectually, some of them MDs
themselves) recounted horror story after horror story of
confusing, confused, grossly incorrect, invalid,
uninterpretable, or totally unjustified billings for medical
care; correspondingly incorrect or incompetent processing of
and decisions about these bills by private and government
insurance payors and benefits plans; and almost total
inability to get useful assistance in dealing with these
organizations -- in short, all the other usual consequences
of dealing with the U.S. health care system.

A senior human resources/staff benefits professional from
our university participating in the meeting noted that the
error rate for medical billings is commonly estimated to be
in the range of 30% of all transactions involved.

I just signed a $495 check for services provided over the
past few months by a professional accountant whose primary
role is as a specialist and consulting in sorting out these
problems. When we first approached her for help, she said
in essence "Just bring in the whole proverbial 'shoebox'
full of confusing and uninterpretable documents resulting
from your wife's recent two-year-long medical adventure [it
was really more like a banker's box than a shoebox in our
case]; don't bother trying to sort anything out; I'll do
that, tell you what bills you still have to pay, file the
claims for those you don't, and do the paperwork to recover
the payments you shouldn't have made." She did so, and has
been more than worth her services.

I'm planning on deducting her fee as a *medical* expense --
right?

This expense is clearly not a medical expense, however, I
would agree with deducting as a Misc Itemized Deduction
subject to 2% of AGI. These expenses are clearly related to
preservation of income producing property (i.e., preserving
investable assets by preventing unnecessary overpayment of
medical expenses). Depending in level of income, expenses
in question, AMT issues and the like, the taxpayer will
probably get no real tax benefit, but I think this is the
most appropriate treatment.

So you're saying that the "income producing property" is
the body of the taxpayer? Not even a judge in a court of
law would agree to such an extension of terms.

Why not a deduction for loss of utility as we become older,
then?

ChEAr$,
Harlan Lunsford, EA n LA

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

 

[Seth]

I'm planning on deducting her fee as a *medical* expense --

This expense is clearly not a medical expense,

If I mail a check to my doctor, is the stamp a medical expense?

Seth

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

 

[Pologirl]

I just signed a $495 check for services provided over the
past few months by a professional accountant [...]
I'm planning on deducting her fee as a *medical* expense --
right?

Others have said or suggested her fee is not a deductible
expense. But tax preparation expenses are deductible, aren't
they? Is an accountant not a deductible expense?

Whether this is a deductible *medical* expense ... I'm not
sure. It is an area where case law applies, and I don't
have access to the literature. You could get a Private
Letter Ruling from the IRS; the fee for one of those
depends on your income but it would exceed $495. But if you
can count it as an ordinary deductible expense, you have
nothing to gain by treating it as a medical expense.

I just finished my own family's tax return for 2006,
including deductions for enormous unreimbursed medical
expenses. I didn't think to count the postage on all the
medical bills I paid by mail, but I did claim mileage for
every trip in a private vehicle for medical care, plus
tolls, parking, public transit, and for all long distance
phone calls and cell phone minutes in excess of plan
relating to medical care. I don't know for a fact these are
allowed, but I felt comfortable enough about it to claim
them.

I wish *I* could have found someone to sort out the piles of
bills and insurance EOB forms for me for just $500. Maybe
with what I learned in the past year, I should start a small
consulting business doing this for others. Once I figured
out how to do it, I kind of enjoyed making order out of
chaos.

Pologirl

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

 

[Harlan Lunsford]

Others have said or suggested her fee is not a deductible
expense. But tax preparation expenses are deductible, aren't
they? Is an accountant not a deductible expense?

Accounting fees are not deductible JUST because they are
paid to us. What makes some fees (not all) deductible is
permission by congress as codified in the tax code. In this
case the law specifically mentions tax preparation and tax
determination.

Whether this is a deductible *medical* expense ... I'm not
sure. It is an area where case law applies, and I don't
have access to the literature. You could get a Private
Letter Ruling from the IRS; the fee for one of those
depends on your income but it would exceed $495. But if you
can count it as an ordinary deductible expense, you have
nothing to gain by treating it as a medical expense.

Remember, not every deduction is or has been the subject of
'case law'.

I just finished my own family's tax return for 2006,
including deductions for enormous unreimbursed medical
expenses. I didn't think to count the postage on all the
medical bills I paid by mail, but I did claim mileage for
every trip in a private vehicle for medical care, plus
tolls, parking, public transit, and for all long distance
phone calls and cell phone minutes in excess of plan
relating to medical care. I don't know for a fact these are
allowed, but I felt comfortable enough about it to claim
them.

Good thing you didn't include the postage; it's not
deductible, nor are phone charges. Get a copy of IRS
publication 50.... 2 I think, the one relating to what is
deductible. Remember, any amount must be for the treatment
of the body (or mind in some cases! lol).

(snipped....)

ChEAr$,
Harlan Lunsford, EA n LA

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>