U.S. Tax Court Ruling Allows Deduction for GID Treatment and Surgery
Feb. 2, 2010. The U.S. Tax Court today issued a long-awaited decision in O’Donnabhain v. Commissioner of Internal Revenue, ruling that treatment for gender identity disorder (GID) qualifies as medical care under the Internal Revenue Code, and is therefore deductible.
“This decision treats Rhiannon O’Donnabhain the way she deserves to be treated—like any hard-working American taxpayer with medical expenses,” said Karen Loewy, senior staff attorney with Gay & Lesbian Advocates & Defenders (GLAD), which represented Ms. O’Donnabhain.
“From the start, this has been a no-brainer. Every mainstream medical authority from the American Psychiatric Association to the National Institutes of Health recognize the legitimacy of providing medical care for transgender people. Dismissing these medical expenses as illegitimate and not deductible was discrimination, pure and simple.”
In an opinion reviewed by the full bench, the United States Tax Court affirmed that medical treatments for GID, including surgery and hormone therapy, are deductible medical expenses. Moreover, the Court stated that the IRS’s position that such treatment is cosmetic in nature “is at best a superficial characterization of the circumstances that is thoroughly rebutted by the medical evidence.”
“I’m overjoyed, not only for me, but for other transgender people,” said Ms. O’Donnabhain. “We deserve respect, equal treatment for our medical care, and fair treatment by our government.”
Born biologically male, Rhiannon O’Donnabhain began having conflicted feelings about her gender identity as early as age 8. After decades of deep suffering, O’Donnabhain was diagnosed in 1996 with GID and undertook a course of professionally prescribed medical treatments that included her 2001 sex reassignment surgery. She claimed the cost of her treatment as a deductible medical expense on her federal income tax return – but the Internal Revenue Service said no, calling the surgery “cosmetic.”
The trial in O’Donnabhain v. Commissioner of Internal Revenue began on July 24, 2007 in Boston, and concluded with post-trial briefing in March 2008. At the trial, Ms. O’Donnabhain testified about her life-long struggle with her gender identity, and her health care providers testified that the treatment was critical to her mental health and ability to function at all levels. Experts testified about Gender Identity Disorder and its treatment.
Ms. O’Donnabhain paid approximately $25,000 out-of-pocket for her care, including therapy, hormone treatment, and surgery. The amount of the deduction she is seeking from the IRS is about $5,000.
“In this landmark ruling, the Tax Court affirmed the consensus position of the medical establishment that transition-related medical care is essential for many transgender people,” explained Jennifer Levi, Director of GLAD’s Transgender Rights Project.
Loewy, along with Levi and GLAD Senior Staff Attorney Bennett Klein, represented Ms. O’Donnabhain along with lawyers from the Boston law firm of Sullivan & Worcester, who are serving as cooperating tax counsel in the case.
read the full text of the court’s decision here (PDF)
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