IRS Revenue Ruling
1997-9

Code Sec. 213

<<FULL TEXT>>

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

Medical and dental expenses. Amounts paid to obtain a controlled
substance (such as marijuana), in violation of federal law, are not
deductible expenses for medical care under section 213 of the Code.


REV. RUL. 97-9

ISSUE

Is an amount paid to obtain a controlled substance (such as marijuana)
for medical purposes, in violation of federal law, a deductible expense
for medical care under section 213 of the Internal Revenue Code?


FACTS

Based on the recommendation of a physician, A purchased marijuana and
used it to treat A's disease in a state whose laws permit such purchase
and use.


LAW AND ANALYSIS

Section 213(a) allows a deduction for uncompensated expenses of an
individual for medical care to the extent such expenses exceed 7.5 percent
of adjusted gross income. Section 213(d)(1) provides, in part, that
"medical care" means amounts paid for the cure, mitigation, and treatment
of disease. However, under section 213(b) an amount paid for medicine or a
drug is an expense for medical care under section 213(a) only if the
medicine or drug is a prescribed drug or insulin. Section 213(d)(3)
provides that a "prescribed drug" is a drug or biological that requires a
prescription of a physician for its use by an individual.

Section 1.213-1(e)(2) of the Income Tax Regulations provides, in part,
that the term "medicine and drugs" includes only items that are "legally
procured." Section 1.213-1(e)(1)(ii) provides that amounts expended for
illegal operations or treatments are not deductible.

Rev. Rul. 78-325, 1978-2 C.B. 124, holds that amounts paid by a
taxpayer for laetrile, prescribed by a physician for the medical treatment
of the taxpayer's illness, are expenses for medicine and drugs that are
deductible under section 213. The revenue ruling states that the laetrile
was purchased and used in a locality where its sale and use were legal.

Rev. Rul. 73-201, 1973-1 C.B. 140, holds that amounts paid for a
vasectomy and an abortion are expenses for medical care that are
deductible under section 213. The revenue ruling states that neither
procedure was illegal under state law.

A's purchase and use of marijuana were permitted under the laws of A's
state. However, marijuana is listed as a controlled substance on Schedule
I of the Controlled Substances Act (CSA), 21 U.S.C. sections 801-971. 21
U.S.C. section 812(c). Except as authorized by the CSA, it is unlawful for
any person to manufacture, distribute, or dispense, or possess with intent
to manufacture, distribute, or dispense, a controlled substance. 21 U.S.C.
section 841(a). Further, it is unlawful for any person knowingly or
intentionally to possess a controlled substance except as authorized by
the CSA. 21 U.S.C. 844(a). Generally, the CSA does not permit the
possession of controlled substances listed on Schedule I, even for medical
purposes, and even with a physician's prescription.

Notwithstanding state law, a controlled substance (such as marijuana),
obtained in violation of the CSA, is not "legally procured" within the
meaning of section 1.213-1(e)(2). Further, an amount expended to obtain a
controlled substance (such as marijuana) in violation of the CSA is an
amount expended for an illegal treatment within the meaning of section
1.213-1(e)(1)(ii). Accordingly, A may not deduct under section 213 the
amount A paid to purchase marijuana.


HOLDING

An amount paid to obtain a controlled substance (such as marijuana) for
medical purposes, in violation of federal law, is not a deductible expense
for medical care under section 213. This holding applies even if the state
law requires a prescription of a physician to obtain and use the
controlled substance and the taxpayer obtains a prescription.


EFFECT ON OTHER DOCUMENTS

Rev. Rul. 78-325 is obsoleted. Subsequent to the issuance of Rev. Rul.
78-325, the courts have upheld the Food and Drug Administration
determination that generally prohibits interstate commerce in laetrile
under the Food, Drug, and Cosmetic Act, 21 U.S.C. sections 331 and 355(a).
See United States v. Rutherford, 442 U.S. 544 (1979); Rutherford v. United
States, 806 F.2d 1455 (10th Cir. 1986). Thus, notwithstanding state and
local law, laetrile cannot be legally procured within the meaning of
section 1.213-1(e)(2). Accordingly, amounts paid to obtain laetrile are
not deductible under section 213.

Rev. Rul. 73-201 is clarified to reflect that the medical procedures at
issue in that revenue ruling are not illegal under federal law.


DRAFTING INFORMATION

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

<<END RULING>>

 

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