rr-99-28.pdf

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# Part I

Section 213 .-- Medical, dental, etc., expenses
26 CFR 1.213-1: Medical, dental, etc., expenses.

(Also § 262; 1.262-1.)

Rev. Rul. 99-28

ISSUE

Are uncompensated amounts paid by taxpayers for
participation in a smoking-cessation program, for prescribed
drugs designed to alleviate nicotine withdrawal, and for nicotine
gum and nicotine patches that do not require a prescription,
expenses for medical care that are deductible under § 213 of the
Internal Revenue Code?
FACTS

Taxpayers A and B were cigarette smokers. A participated in
a smoking-cessation program and purchased nicotine gum and
nicotine patches that did not require a prescription. A had not
been diagnosed as having any specific disease, and participation
in the program was not suggested by a physician. B purchased
drugs that required a prescription of a physician to alleviate

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the effects of nicotine withdrawal. A's and B's costs were not
compensated for by insurance or otherwise.

LAW AND ANALYSIS

Section 213 (a) allows a deduction for uncompensated expenses
for medical care of an individual, his spouse or a dependent to
the extent the expenses exceed 7.5 percent of adjusted gross
income. Section 213 (d) (1) provides, in part, that medical care
means amounts paid for the diagnosis, cure, mitigation,
treatment, or prevention of disease, or for the purpose of
affecting any structure or function of the body.

Under § 213 (b), a deduction is allowed for amounts paid
during the taxable year for medicine or a drug only if the
medicine or drug is a prescribed drug or insulin. Section
213 (d) (3) defines a "prescribed drug" as a drug or biological
that requires a prescription of a physician for its use by an
individual.

Section 1.213-1 (e) (1) (ii) of the Income Tax Regulations
provides, in part, that the deduction for medical care expenses
will be confined strictly to expenses incurred primarily for the
prevention or alleviation of a physical or mental defect or
illness. An expense that is merely beneficial to the general
health of an individual is not an expense for medical care.

Section 262 provides that, except as otherwise expressly
provided by the Code, no deduction is allowed for personal,
living, or family expenses.

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Rev. Rul. 79-162, 1979-1 C.B. 116, holds that a taxpayer who
has no specific ailment or disease may not deduct as a medical
expense under § 213 the cost of participating in a smoking-
cessation program. However, the Internal Revenue Service has
held that treatment for addiction to certain substances qualifies
as medical care under § 213. See Rev. Rul. 73-325, 1973-2 C.B.
75 (alcoholism) ; Rev. Rul. 72-226, 1972-1 C.B. 96 (drug
addiction) .

A report of the Surgeon General, The Health Consequences of
Smoking: Nicotine Addiction (1988), states that scientists in the
field of drug addiction agree that nicotine, a substance common
to all forms of tobacco, is a powerfully addictive drug. Other
reports of the Surgeon General have concluded, based on numerous
studies, that a strong causal link exists between smoking and
several diseases. See, e. g. , Tobacco Use Among U. S.
Racial/Ethnic Minority Groups (1998); Preventing Tobacco Use
Among Young People (1994) ; The Health Benefits of Smoking
Cessation (1990). Scientific evidence has thus established that
nicotine is addictive and that smoking is detrimental to the
health of the smoker.

Under the facts provided, the smoking-cessation program and
the prescribed drugs are treatment for A's and B's addiction to
nicotine. Accordingly, A's costs for the smoking-cessation
program and B'S costs for prescribed drugs to alleviate the
effects of nicotine withdrawal are amounts paid for medical care

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under § 213 (d) (1). However, under § 213 (b), A's costs for
nicotine gum and nicotine patches are not deductible because they
contain a drug (other than insulin) and do not require a
prescription of a physician.

HOLDING

Uncompensated amounts paid by taxpayers for participation in
a smoking-cessation program and for prescribed drugs designed to
alleviate nicotine withdrawal are expenses for medical care that
are deductible under $ 213, subject to the 7.5 percent
limitation. However, amounts paid for drugs (other than insulin)
not requiring a prescription, such as nicotine gum and certain
nicotine patches, are not deductible under § 213.

EFFECT ON OTHER DOCUMENTS

Rev. Rul. 79-162 is revoked.

## DRAFTING INFORMATION

The principal authors of this revenue ruling are Donna M.
Crisalli and John T. Sapienza, Jr. of the Office of Assistant
Chief Counsel (Income Tax and Accounting) . For further
information regarding this revenue ruling, contact Ms. Crisalli
or Mr. Sapienza on (202) 622-4920 (not a toll-free call) .