Oregon ~ Personal Income Tax: Medical Care, Business Expenses Deductions Allowed

CCH Tax Day Report

The Oregon Department of Revenue’s disallowance of certain personal income tax deductions for medical care expenses and consulting fees paid to a contractor were reversed because the taxpayers met the burden of proof. Generally, deductions are granted for qualified long-term care expenses of a “chronically ill individual” if a licensed health care practitioner certifies that the individual meets the conditions for the prior 12 months. In this case, the taxpayers’ dependent mother was provided care in a foster home according to a licensed health care practitioner’s prescription and the records regarding her care satisfied the statutory certification condition. Accordingly, the taxpayers were granted the claimed medical care expense deduction.

The taxpayers were granted business expense deductions for payment of consulting fees to a third party, despite their not filing “information returns” for the tax year in question, because the third party was a contractor and the taxpayers fell outside of the filing threshold for that year.

Donohoe v. Department of Revenue, Oregon Tax Court, No. TC-MD 150521N, August 23, 2016, ¶401-246

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