SRS may now be tax-deductible

[labete]

I think this news is fantastic. This is only one woman who's won and it's not clear yet how or whether this will be applied as a precedent across the board, but it's a big step in the right direction.

Tax court allows deduction for woman’s sex change
By The Associated Press
02.03.2010 9:48am EST

(Boston) The U.S. Tax Court ruled Tuesday that 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.

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.

“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,” said Jennifer Levi, a GLAD attorney.

IRS spokeswoman Michelle Eldridge declined to comment on the ruling.

In a 2007 interview with The Associated Press, O’Donnabhain said she underwent sex-reassignment surgery at age 57, after a tormented existence as a father, husband, Coast Guardsman and construction worker.

She wrote off the $25,000 in medical expenses on her taxes, but the IRS disallowed the deduction, ruling that the procedure was not a medical necessity.

O’Donnabhain, now 65, said she brought the lawsuit in an attempt to force the IRS to treat sex-change surgeries the same as appendectomies, heart surgeries and other deductible medical procedures.

“It is not OK for them to do this to me or anyone like me,” she said.

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.

The tax court said O’Donnabhain could deduct as a medical care expense the costs associated with treating her gender-identity disorder, including sex-reassignment surgery and hormone therapy. But the court said she could not deduct the costs of breast augmentation surgery because it found that she had achieved breast enhancement through hormone treatments.

[Linus]

A sound and just ruling. Good for her and thanks to her for standing up for trans-rights.

[labete]

Oh and: I have to give kudos to the AP for how they handled the reporting. I saw no snide implications that the decision was wrong or that there was something wrong with the petitioner or that her surgery was in any tax-related qualitative way different from the other surgeries mentioned. The press is evolving toward a more neutral or supporting language for LGBTQ issues, and it's a welcome change.

[Dylan]

Transfolks have been deducting surgery for years. It's kind of been a "Deduct it and see if they call you on it" type o' thing, though. Sometimes, the IRS does, and sometimes they don't.

So, it's nice to see there's actually been some legal precedent set.



Thanks For The Link,
Dylan

[Blade]

I used the medical deduction several years ago. I think the amount had to exceed 6% of your income back then. H&R Block didn't ask for any receipts or anything just the amount. It was the sum of Dr office visits, medication and procedures that weren't covered by insurance and any special equipment needed during that time.

I think the ruling is great though. I guess I didn't realize that it had to be a medically necessary thing to make the deduction. Thank goodness I guess it was 10 yrs ago, so the can't come back on me now.

[theoddz]

I'm curious......does anyone else who takes ANY medical expenditures (for ANY condition, etc.) off as deductions have to explain, specifically, what those medical expenditures are for?? Wouldn't a requirement for divulging that sort of information be a direct violation of HIPPA regs??

I plan to take my expenses for top surgery off on my taxes.

~Theo~

[Andrew, Jr.]

Theo,

I itemize, and no I don't have to explain anything, then or now. I also have never been audited. Just group doctor visits together, medicines, equipment, and so on. You will be fine. Dylan & Blade are right.

Thanks for the link. I am so glad to see this moving forward positively.

Andrew