Rev. Rul. 59-393

The Internal Revenue Service will not follow the decision of the United States Court of Appeals for the Third Circuit in Drayton Heard, et ux. v. Commissioner , 269 Fed.(2d) 911.

The point at issue in this case was whether the entire premium paid under an insurance policy providing indemnity for accidental loss of life, limb, sight and time, and also providing for reimbursement of medical expenses resulting from nondisabling accidents, was deductible as a medical expense under section 23(x) of the Internal Revenue Code of 1939. The Internal Revenue Code of 1954 continues section 23(x) as section 213.

The Service contended that only the pro rata portion of the premium which was properly attributable to the coverage for medical expenses was deductible as an expense paid for medical care. However, the court decided that the entire amount of the premium was deductible.

While it is not feasible that review by the Supreme Court of the United States be requested in the Heard case, the decision will not be followed as a precedent in the disposition of similar cases pending further developments on the issue.

¹ Based on Technical Information Release 185, dated November 10, 1959.