Court Rules Sex-Change Surgery Is Tax-Deductible

(Feb. 3) -- Along with their home office expenses and one-half of the cost of their business meals, American taxpayers can take a tax deduction for their sex-change operations. On Tuesday, the U.S. Tax Court ruled that a Massachusetts woman can write off the $25,000 price tag of her hormone therapy and gender-reassignment surgery because the procedures were medically necessary.

Rhiannon O'Donnabhain, who was born a man, had sued the Internal Revenue Service in 2007 after the agency denied her $5,000 deduction after deeming the procedures "cosmetic." In an opinion that could have a far-reaching effect on transgender Americans, the Tax Court said it found the IRS' argument "at best a superficial characterization of the circumstances" and one that was "thoroughly rebutted by the medical evidence," ABC News reported. "(Gender identity disorder) is a well-recognized and serious mental disorder," the majority wrote.

According to the Gay and Lesbian Medical Association, between 1,600 and 2,000 Americans undergo sex-change surgery every year.

Lawyers for Gay & Lesbian Advocates & Defenders, who represented O'Donnabhain, argued that the tax code should approach her condition the same way it does other recognized mental disorders; treatment for alcoholism, for example, is considered tax-deductible. In a GLAD press release, O'Donnabhain said she was "overjoyed, not only for me, but for other transgender people. We deserve respect, equal treatment for our medical care and fair treatment by our government."

GLAD attorney Jennifer Levi also praised the decision. "I think what the court is saying is that surgery and hormone therapy for transgender people to alleviate the stress associated with gender identity disorder is legitimate medical care,'' she told The Boston Globe.

In 2007, O'Donnabhain spoke to The Associated Press about her decision to undergo a sex change. "I always thought the feelings would go away. If I date, the feelings will go away; if I marry, they'll go away; if I do male stuff, they'll go away. But of course, they never went away," she said. "I finally reached a point where I just couldn't contain this any more. I felt like my life was unraveling."

Some commentators cautioned, however, that the implications of the ruling could be as complicated as gender itself. "This case ineluctably contributes to the medicalization and pathologization of gender identity," Tony Infanti wrote at the Feminist Law Professors blog.

One thing O'Donnabhain won't be able to write off: her breast augmentation surgery, which the court said is not medically necessary.