The U.S. Tax Court ruled . . . a Massachusetts woman should be allowed to deduct the costs of her sex-change operation, a decision that could have broad implications for transgender people.
-- From "Tax Court Allows Deduction for Woman's Sex Change" by Denise Lavoie, The Associated Press 2/2/10
Rhiannon O'Donnabhain (oh-DON'-oh-vin), who was born a man, sued the Internal Revenue Service after the agency rejected a $5,000 deduction for approximately $25,000 in medical expenses associated with the sex-change surgery.
The IRS said the surgery was cosmetic and not medically necessary.
In its decision Tuesday, the tax court said the IRS position was "at best a superficial characterization of the circumstances" that is "thoroughly rebutted by the medical evidence."
The legal group Gay & Lesbian Advocates & Defenders, which represented O'Donnabhain, said the ruling could potentially affect thousands of people a year in the U.S. who undergo similar operations.
O'Donnabhain's lawyers argued that because gender-identity disorder is a recognized mental disorder that is generally treated with hormones and surgery, the costs are legitimate medical deductions.
The tax court agreed.
"The evidence amply supports the conclusions that petitioner suffered from severe GID, that GID is a well-recognized and serious mental disorder, and that hormone therapy and sex reassignment surgery are considered appropriate and effective treatments for GID by psychiatrists and other mental health professionals who are knowledgeable concerning the condition," the court said in its ruling.
An estimated 1,600 to 2,000 people a year undergo sex-change surgery in the United States, according to the Gay and Lesbian Medical Association.
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From "Woman Says Sex-Change Tax Battle Also Helps Others Sign in to Recommend" by The Associated Press 2/3/10
The legal group Gay & Lesbian Advocates & Defenders, which represented O'Donnabhain, said the decision could potentially affect thousands of people a year in the U.S. who undergo similar operations.
Lambda Legal, a national civil rights group for lesbians, gay men, bisexuals and transgender people, called the ruling "a case of the federal government catching up with medical standards."
The Tax Court voted 11-5 to grant the deduction.
In a dissenting opinion, Judge David Gustafson said he believes sex reassignment surgery falls within the "cosmetic surgery" category of the tax code and the expense is therefore not deductible.
Even if such surgery "is medically indicated ... it is an otherwise cosmetic procedure that does not 'treat' the mental disease," Gustafson wrote.
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