IRS Nixes Request for Tax Break on Surrogacy-Related Expenses

The IRS in a private letter ruling rejected much of a married couple’s request to deduct costs and fees related to a surrogate pregnancy as medical expenses on their tax return.

The couple plan to use a surrogate and in vitro fertilization with a donated egg and the husband’s sperm, because the wife was diagnosed with conditions requiring her to take medication that is detrimental to pregnancy. The taxpayers had asked the IRS for authorization to deduct related expenses, but the IRS ruling released Friday bars them from deducting expenses for procedures not performed directly on them.

The agency argued ...