IRS Slams the Door on Tax Deductions for Misleading Weight-Loss Ads

The IRS has issued a firm warning to taxpayers about falling for misleading advertisements from companies selling weight-loss foods and marketing them as medical supplies.

Weight-Loss Companies Use Tax Season to Make Sales

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Tax season is in full swing, and unfortunately for many taxpayers, some companies are using the impending deadline to boost their sales. 

Misleading Ads Cause Trouble

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Some Americans are learning the hard way that advertisements for weight-loss products are not always entirely accurate in their claims. 

IRS Issues Warning

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Referring to unnamed companies, the IRS warned that there are some advertisements suggesting that their weight-loss food products can be written off as medical expenses, but that is untrue.

“Be Careful to Follow the Rules”

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“Legitimate medical expenses have an important place in the tax law that allows for reimbursements, but taxpayers should be careful to follow the rules,” Danny Wefel, IRS Commissioner, said in a statement.

“Aggressive Marketing” Tactics Land Customers in Hot Water

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Werfel cautioned against “some aggressive marketing that suggests personal expenditures on things like food for weight loss qualify for reimbursement when they don’t qualify as medical expenses.”

Misinformation About Tax Benefits

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It appears that some companies (either acting in bad faith or poorly informed), in an effort to promote their weight-loss products, have used false claims in their marketing materials. 

Misleading Claims

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These companies claim that if customers obtain notes from their doctors stating that their purchases of foods advertised as “weight-loss” friendly were necessary for their health, those costs could then be written off as a medical expense. 

Food is Not a Medical Expense

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As Werfel explained, those claims are unfounded. Food is considered a personal expense and is not eligible to be treated as a medical expense for tax purposes.

IRS Sending Out Reminders

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As tax day draws nearer, the IRS has been issuing many reminders to Americans in preparation of filing their tax returns. Some of these reminders have been met with ridicule online, such as the insistence that income earned by engaging in illegal acts should be reported to the IRS.

Tips for Reporting Illegal Earnings Prompt Ridicule

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“Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Schedule 1 (Form 1040), line 8z, or on Schedule C (Form 1040) if from your self-employment activity,” reads a guideline from the IRS.

Stolen Property is Also Taxable, says IRS

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The guide elaborates, saying that stolen property must be reported too, by way of reporting it’s “FMV (fair market value) in your income in the year you steal it, unless in the same year you return it to its rightful owner.”

IRS Under No Obligation to Report Crimes

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Citizens employed in occupations that fall outside of normal legal boundaries will be relieved to know that if they decide to report the income they earn, the IRS is not obligated to report their crimes. 

Consequences of False Reporting on Taxes

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While criminals are unlikely to report illegal earnings, the IRS hopes that taxpayers take its advice seriously. Failure to accurately report income can lead to severe consequences, including jail time.

Changes to Tax Credits

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The IRS has made headlines in recent weeks with other important advice, such as Werfel’s directions to move forward with filing despite uncertainty around Congress’s decision on certain tax breaks.

Tax Package Passed House, Senate Vote Pending

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A $78 billion tax package passed the House of Representatives earlier this year, but its fate is still uncertain as it awaits a Senate vote. 

The Tax Relief for American Families and Workers Act

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The bill, named The Tax Relief for American Families and Workers Act, would include relief for businesses and an increased child tax credit, among other provisions. 

Should You Delay Filing Taxes?

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Many Americans wondered if they should refrain from filing their taxes until after the final vote, worrying that if there were changes to the child tax credit after they filed, their returns would not be accurate and they would not receive the additional credit.

IRS Says: File When You’re Ready

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Werfel urged people to continue to file their tax returns as soon as they were ready, noting that any changes to credits would be handled in-house by the IRS. 

IRS Will Handle Needed Adjustments

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He confirmed that modifications to returns would be made automatically on an as-needed basis, and any additional refunds due to taxpayers would be processed. 

IRS Suggests Caution

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The government continues to encourage Americans to familiarize themselves with IRS rules so they don’t find themselves in a tricky situation after filing due to misinformation. As always, taxpayers should get their tax advice from the IRS or a trusted tax professional.

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The post IRS Slams the Door on Tax Deductions for Misleading Weight-Loss Ads first appeared on Thrift My Life.

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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.