So I got a notice from the IRS which declared all $1,319.28 in distributions from my Health Savings Account for the tax year 2018 as income and put the burden on me to demonstrate otherwise.
First, if any of you are wondering why I only had $1,319.28 in distributions (which were all to health care providers), it's because I was on a $6500 deductible plan and most of my deductible was exhausted by Remistart payments for Remicade (which are credited against my deductible) and I am actually paying out of pocket only for very little of that amount.
Second, I got my 2018 HSA statements and they clearly show the $1319.28 in distributions were to my GI's office for Remicade, pharmacy prescriptions, etc. and not a penny of it went to me or in my pocket.
I spoke to my accountant and he thinks that the HSA statements alone will be good enough and that I will not have to argue with the IRS over, for example, whether the $40 I paid Rite Aid was for a medical prescription or milk and cereal and groceries etc. Because the HSA statements do not have that level of detail. They showed $40 was paid to Rite Aid on a certain date, but not what was purchased.
I was just wondering whether anyone else similarly had HSA distributions declared by the IRS to be income and what the level of proof was as to whether it was a legitimate medical expense, or something other than that?