n letter ruling 200521003, the IRS held that tuition paid to a school program to help dyslexic children deal with their condition was an IRC section 213(a) deductible medical expense. The ruling broadens albeit slightlythe definition of the kinds of payments that qualify as deductible medical costs. CPAs, however, should be aware of the rulings inherent limits and be prepared to address the other restrictions on the medical deduction.
OVERVIEW
In the ruling, the taxpayers two children were diagnosed wi th disabilities caused by medical conditions (including dyslexia) that handicapped their ability to learn. The taxpayers enrolled the children in a school that provided them with special education designed to enable them to cope.
LIMITS
Before taxpayers claim tuition as a deduction, however, there are other requirements in letter ruling 200521003: Medical care must be a principal purpose for attending the institution. The institutions program must be designed and administered by qualified professionals for the purposes of treating the dependents medical condition. Ordinary education must be incidental. Further, medical expenses are deductible only to the extent they exceed 7.5% of the taxpayers adjusted gross income. Finally , letter rulings apply only to the taxpayer who obtained the ruling; they are not precedential. However, they do show the services thinking on a particular issue. For more information, see the Tax Clinic, edited by Joel Ackerman, in the October 2005 issue of The Tax Adviser. Lesli S. Laffie, editor The Tax Adviser
http://www.journalofaccountancy.com/Issues/2005/Nov/DyslexiaProgramTuitionIsAValidDeduction.htm