Tax Time! Can Your Clients Deduct Your Patient Advocacy Services?

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Tax Time! Can Your Clients Deduct Your Patient Advocacy Services?

(With apologies to Canadian advocates – this post is targeted to taxpayers in the United States.) This question pops up about this time each year – whether or not patient advocacy services are a ‘qualified medical expense’ in the eyes of the IRS;  whether or not your clients can deduct your bills in order to reduce their tax liabilities. Keeping in mind that I am not an IRS representative, nor am I a CPA or tax preparer, I still say – go for it – at least for many of the services we advocates provide.  Why not try? Hear me out, because this statement comes from several years of trying to sort it out without being able to get a ruling from the IRS. Why no ruling?  Because, as we learned in 2010, in order to get a ruling, the deduction must be legally tested.  That can only happen if someone actually deducts the cost of an advocate, is then audited by the IRS, is questioned during the audit about taking the deduction, and then has to defend the deduction. That means we advocates can’t figure it out unless one of us actually tries to take a deduction for hiring another one of us.  I don’t see that happening. No – this will fall on the shoulders of a client who decides to take the plunge.  It could be a decade before it happens, if ever!  And in the interim, all those folks who could have enjoyed the lower tax bill will have missed out. So as I said – for many of the services we provide (see which ones below), why not give it a try?  For 2012 taxes, IRS topic 502 addresses Medical and Dental Expenses.  Their definition: Medical care expenses include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body. They then provide a list of qualified expenses and non-qualified expenses. Advocates are no where to be seen on either list, but (again, as we learned in 2010) there are some other expenses…


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