Sex Change Surgery, Expenses Are Tax Deductible, Tax Court Rules

Yesterday the US Tax Court ruled that sex change surgery is tax deductible.  From HuffPost:

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.

And people are predicting that mandated insurance coverage for re-assingment surgery is coming soon:

Even if the insurance companies won’t remove the restriction on their own, pressure to do so will be coming soon from employers. To score the coveted 100% on the 2012 Corporate Equality Index (CEI) of the Human Rights Campaign, an employer will need to have at least one insurance option available to all employees where transgender exclusions are removed or substantially modified to ensure coverage for transgender-specific treatment. Additionally, the CEI will require that the WPATH Standards of Care are used to determine what treatment will be considered medically necessary and not cosmetic.

So even if the IRS chooses to spend more taxpayer dollars appealing the Tax Court’s decision, things are headed in a direction that might substantially reduce the number of people taking the deduction in the first place.

Gee, I wonder if they’re also going to call for transgender reproduction to be mandated coverage because it is medically necessary to be able to procreate as their “true” sex?

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