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paid to Mrs. Emanuel by Eastern Airline’s disability insurance
carrier, American International Domestic Brokerage Group (AIG):
Year Amount
1996 $15,834
1997 17,616
1998 15,474
Petitioners maintain that they are entitled to deduct the amounts
paid to Mrs. Emanuel as medical expenses.4
Section 213 allows the taxpayer to deduct amounts paid for
medical expenses. A taxpayer may deduct amounts that the
taxpayer has paid for himself (or his dependent), but not amounts
that a third party has paid on the taxpayer’s behalf. See
McDermid v. Commissioner, 54 T.C. 1727 (1970). Because AIG paid
Mrs. Emanuel, petitioners cannot deduct as a medical expense the
payments received.
Petitioners argue that the funds paid to Mrs. Emanuel belong
to Mr. Emanuel and are his to “direct as he sees fit”, and that
he could have received the funds directly from AIG and paid Mrs.
Emanuel himself.5 Assuming, arguendo, that we were to accept
4 As previously indicated, petitioners now agree that the
amounts should have been reported as gross income in their
respective income tax returns.
5 Petitioners also cited a private letter ruling which
bears no factual resemblance to this case. In any event, private
letter rulings may be helpful but have no precedential force.
Rowan Cos., Inc. v. United States, 452 U.S. 247, 261 n.17 (1981);
Phi Delta Theta Fraternity v. Commissioner, 887 F.2d 1302, 1308
(6th Cir. 1989), affg. 90 T.C. 1033 (1988).
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