Are guardianship legal fees tax deductible?

Section 213(a) of the Internal Revenue Code allows a deduction for certain expenses paid for medical care of the taxpayer, the taxpayer’s spouse or a dependent.  “Medical care” includes 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.”[1]  The IRS understands that a guardianship proceeding may be undertaken out of necessity, in order to obtain medical care, and the IRS accepts that “medical expenses” may include legal fees paid that are necessary to authorize treatment.[2]    

Are the fees deductible?  The question is simple, but the answer is often difficult to derive.  “Deductions for expenditures for medical care allowable under section 213 will be confined strictly to expenses incurred primarily for the prevention or alleviation of a physical or mental defect or illness.”[3]  A proper analysis considers whether the relationship between the legal fees and the treatment is direct or proximate; a mere connection is insufficient.[4]  Legal fees for the management of the guardianship estate cannot be included.[5]

Various factors and conditions inform the analysis, including whether the expenditure was an “essential element” of the treatment, and whether the expense would have been incurred for nonmedical reasons.  In Gerstacker v. CIR, for example, the court allowed for the deduction of fees because the guardianship “accomplished an essential part of the prescribed therapy.”[6] 

The question of whether the legal fees for guardianship are tax deductible merits careful consideration of the context and facts, and thoughtful analysis informed by the Internal Revenue Code, Tax Regulations, Tax Court case opinions and other related publications. 

If you have questions about the deductibility of guardianship fees, or need general assistance with guardianship, please contact Van Slett Law, LLC at (262) 888-7878.

[1] IRC §213(d)(1)(A).

[2] See, e.g. IRS Publication 502 (2019), Medical and Dental Expenses.

[3] Income Tax Regulations § 1.213-1(e) (1)(ii).

[4] See, e.g. Gerstacker v. CIR, 414 F.2d 448 (6th Cir. 1969) Gerstacker v. CIR, 414 F.2d 448 (6th Cir. 1969)

[5] See, e.g. IRS Publication 502 (2019), Medical and Dental Expenses.

[6] Gerstacker v. CIR, 414 F.2d 448, 453 (6th Cir. 1969)