The Tax Court has denied a Brooklyn tax lawyer’s attempt to claim over $100,000 in payments for prostitutes and pornography as medical expense deductions.

In the case, William G. Halby v. Commissioner of Internal Revenue, Judge Joseph Robert Goeke noted, “During 2004 and 2005 petitioner frequented prostitutes in New York. Petitioner did not visit these prostitutes as part of a course of therapy prescribed by his doctor, nor did petitioner ask his doctor to prescribe any sort of sex therapy. Petitioner kept track of these visits in a journal. The journal included the date, the name of the ‘service provider,’ and the amount. Petitioner did not discuss these visits with his doctors afterwards to determine their impact on his health. During 2004 and 2005, petitioner purchased pornography and books and magazines on sex therapy. Petitioner also recorded the dates and amounts of the purchases in his journal.”

Halby, 78, a retired tax attorney who occasionally consults for the firm McMillan, Constabile, Maker & Perrone, claimed medical expense deductions of $76,314 on his Schedule A for 2004 and $49,203 for 2005. The IRS issued a notice of deficiency for 2004 disallowing $2,368 for medical books, magazines, videos, and pornographic material; $65,934 for prostitutes; and $5,632 in bank and finance charges incurred in connection with loans used to pay for the claimed medical expenses. The $47,024 disallowed for 2005 included $5,005 for books, magazines, videos, and pornographic materials; and $42,152 for prostitutes.

The judge agreed with the IRS that Halby was not entitled to deduct the amounts at issue. “Patronizing a prostitute is illegal in the State of New York,” he wrote, adding, “Petitioner’s payments to various prostitutes were personal expenses not prescribed by a doctor and not intended to treat a medical condition. Petitioner is not entitled to deductions for these amounts. Petitioner is likewise not entitled to deductions for amounts paid for books and magazines on sex therapy and pornography. The purchases were not for the treatment of a medical condition but were instead personal items.”

The court upheld the IRS’s determination that Halby pay $21,491 in back taxes and $4,298 in accuracy-related penalties. Halby also lost a case last September in the New York State Division of Tax Appeals in which he had tried to deduct $322,000 in sex-related charges for 2001-2005.

Halby told WebCPA that he intended to file a motion for reconsideration of the findings of opinion on constitutional grounds. He noted that the judge's ruling did not take into consideration the merits of his argument that the New York State statute outlawing prostitution violates the constitutional right to privacy.

"I cited a lot of medical literature in my brief," he said. "This is medical treatment and does not have to be prescribed by a doctor. It's not the licensing or qualification of the person who renders the service, but that the service is medical."

Halby also cited cases such as Lawrence v. Texas and Cherry v. Koch in his brief, and he noted that in some European countries such as Denmark, Germany, and Switzerland, the treatment he received would be considered medical in nature. He also has an appeal pending before the New York State tribunal. He does not expect either the federal or state appeals to come up for consideration until next year.

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The title is a bit ambiguous - this was denied to a client claiming his activities as medical costs.

I'd think that for a service provider - regular health checks would be a cost of doing business - arguably should be deducted against Self Employment income on Schedule C, instead of Schedule A, where it is universally available, but limited to the extent that you have to be really sick and moderately poor to see any benefit from it.

/Bada-boom.

How about those other stories headlined at bottom - can you inbox me the one on Koosman? I never xould stand the Mets

Scratch that.

I think that probably needs a correction.

"who USED TO consult for the firm McMillan....."

Medical Consideration

Medicare, the government health insurance plan for the elderly must offer to help pay for medically necessary drugs, officials said. That would include Viagra, and other erectile dysfunction drugs.
In order for ED drugs to work there must be the touching, kissing, cuddling, etc. in the context of a sexual encounter.

The challenge is to find a medical practitioner who would write a prescription for the “sex therapist.” There are medical/psychological benefits for a man to have sex and orgasms. Prostate health as mentioned by Rockout is but one.

Civil liberty/human rights considerations

How consenting adults privately meet there sexuality needs (an inalienable right endowed by our creator) is not the business of government.

Most people in our society consider receiving money in exchange for sex as being immoral. A beautiful young woman who marries a rich old man for money is considered immoral, but not illegal. A woman who has a “sugar daddy” mistress relationship is considered immoral, but not illegal. Only the woman who receives money for sex from multiple men is considered to be illegal.

The concept of having sex in a stable, monogamous relationship between a man and a woman is a beautiful one and one that is important for the providing of children. However, alternative lifestyles can be equally as beautiful to the participants. A country that was founded on the principle of freedom of religion should not have laws that enforce religious moral values.

Tax ruling

As noted by the judge, “Patronizing a prostitute is illegal in the State of New York.” Therapeutic regimens which are illegal or outside of prevailing medical practices would not be expected to be tax deductable. In a stretch beyond reason, I suppose one could get a prescription for sex and travel to a jurisdiction where sex for money is legal (the Bunny Ranch in Nevada) and claim all associated expenses.

I for one am not interested in pursuing this as tax deduction, would be nice, but it’s an idiot mission.

Hopeful outcome

That our hobby if conducted out of the view of the general public, such as on adult social networking sites like RB between consenting adults would no longer be considered illegal as the hobby as medical, emotional well being, and human rights benefits.

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Too much sex is still not enough