Thanks Opus & Sweetie. This helps a lot. I used the debit card at a doctor's office for a copy and at a chiropractor. I never submitted proof because i figured that since the CC machine used was coded as ABC Doctor's Office and ABC Chiropractor they'd be fine. Nope. The letter the FSA sent indicated my former employer would issue a new W2 for me and say the $300 was taxable income. I have no idea what the plan document says about this stuff but I will request it. Since this all sounds more like a contract dispute between me and the FSA and not an IRS rule I suppose i could ask a state employment regulator for help. The taxes on $300 is not the end of the world but the whole thing just makes me angry-- since these expenses were medical copays.
