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Archer MSA question about deduction


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Here is an email I received from a co-worker. I know nothing about these accounts. Hopefully I can get some input here.

"We have a potential client who has an Archer MSA plan. Proprietorship with Dr.'s wife as an employee. They funded MSA contributions in 2005 from their personal account. Their current accountant says they cannot deduct the contributions because they were paid out of their personal account rather than the proprietorship account. He also advised them that they need to distribute their 2004 contributions before October 15 to avoid problems.

I fail to see why it makes any difference which account you pay the contributions from. They have a qualified high deductible health plan. Contributions are within limits. From what I have read, I think they can deduct on Schedule C (if they meet rules for covering other employees) or on line 31 of Form 1040 if they can't deduct on Schedule C."

Are we missing something? Is there a particular citation you could refer me to? Thanks in advance for any assistance!!

QPA, QKA

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