DC Tax Flash: IRS Proposes Rules on Deductibility of Payments for Medical Care Arrangements

Tax Alert

The Internal Revenue Service (IRS) today issued proposed regulations on the tax treatment of amounts paid for certain medical care arrangements, including direct primary care arrangements, health care sharing ministries, and government-sponsored health care programs. The move was prompted by the president's Executive Order 13877 issued last June directing the Treasury Department to take action.

The rules propose that "expenditures for direct primary care arrangements and health care sharing ministry memberships are amounts paid for medical care as defined in section 213(d), and that amounts paid for those arrangements may be deductible medical expenses under section 213(a)," the IRS explains. The rulemaking also clarifies that "amounts paid for certain arrangements and programs, such as health maintenance organizations (HMO) and certain government-sponsored health care programs, are amounts paid for medical insurance under section 213(d)(1)(D)."

The IRS notes that the rules do not affect the tax treatment of any medical care arrangements that currently qualify as medical care under section 213(d).

The 26-page text of the proposed regulations is posted here.

An IRS press release is posted here.

Miller & Chevalier Coronavirus Task Force
The outbreak of COVID-19 is creating significant business and legal challenges for companies throughout the world. In response to client demand, the firm has formed an interdisciplinary task force to help businesses navigate these issues.

COVID-19 Resource Library
We also maintain a resource library of legislative responses and regulatory guidance related to COVID-19.

The information contained in this communication is not intended as legal advice or as an opinion on specific facts. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. For more information, please contact one of the senders or your existing Miller & Chevalier lawyer contact. The invitation to contact the firm and its lawyers is not to be construed as a solicitation for legal work. Any new lawyer-client relationship will be confirmed in writing.

This, and related communications, are protected by copyright laws and treaties. You may make a single copy for personal use. You may make copies for others, but not for commercial purposes. If you give a copy to anyone else, it must be in its original, unmodified form, and must include all attributions of authorship, copyright notices, and republication notices. Except as described above, it is unlawful to copy, republish, redistribute, and/or alter this presentation without prior written consent of the copyright holder.