Tax Court allows deduction for sex-change operation

“The tax court has spoken for my community and has supported my community by saying that this is a proper medical deduction, much the same as an appendectomy or open heart surgery,” Rhiannon O’Donnabhain said in an Associated Press report. “It was a proper medical deduction, and it certainly is not cosmetic surgery as the IRS contended.”

 

O’Donnabhain, who was born male, was diagnosed in 1997 with gender-identity disorder. Her doctors recommended sex-change surgery, claiming it was a medical necessity. O’Donnabhain underwent hormone therapy, sex-reassignment surgery, and breast augmentation surgery. Under Section 213 of the Internal Revenue Code, O’Donnabhain claimed a medical expense deduction for the cost of the surgeries, transportation, feminizing hormones, and other related expenses for the taxable year 2001.

 

O’Donnabhain received her tax refund in June 2002, but was audited six months later, according to the Boston-based Gay & Lesbian Advocates & Defenders (GLAD), a civil rights advocacy group. O’Donnabhain contacted GLAD, whose attorneys assisted her in appealing the tax examiner’s decision. The matter progressed to Tax Court, where a trial took place in 2007.

 

Although the Tax Court ruled that O’Donnabhain’s hormone therapy and sex-reassignment surgery were for the treatment of a disease and should be considered medical care under Section 213(d)(9)(A), the Court ruled that her breast augmentation surgery was “directed at improving [her] appearance” and she has not shown that the surgery either “meaningfully [promoted] the proper function of the body” or “[treated] the disease,” according to court documents.