IRS sued over
sex-change deduction
By DENISE LAVOIE, AP
from news.yahoo.com on the Web. July 17, 2007
Boston, July 16 -- After a
tormented existence as a father, a husband, a Coast Guardsman and a construction
worker, a 57-year-old suburban Boston man underwent a sex-change operation.
Then she wrote off the $25,000 in medical expenses on her taxes.
But the IRS disallowed the deduction — ruling the procedure was cosmetic, not a
medical necessity — in a potentially precedent-setting dispute now before the
U.S. Tax Court.
Rhiannon O'Donnabhain is suing the IRS in a case advocates for the transgendered
are hoping will force the tax agency to treat sex-change operations the same as
appendectomies, heart bypasses and other deductible medical procedures.
The case is set to go to trial July 24.
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.
O'Donnabhain said she could have paid back the approximately $5,000 she received
in her tax refund, but decided to challenge the IRS because she believes the
ruling against her was rooted in politics and prejudice.
"This goes way beyond money," O'Donnabhain said in an interview with The
Associated Press. "If I were to give the money back, it would be saying
it's OK for you to do this to me. It is not OK for them to do this to me
or anyone like me."
The U.S. Tax Court has never issued an opinion in a similar case, said Jennifer
Levi, an attorney with Gay & Lesbian Advocates & Defenders, the Boston-based
legal organization representing O'Donnabhain. But the IRS has ruled
against allowing the deduction in at least one other case.
In a 2005 case, the IRS ruled the costs of a woman's gender reassignment surgery
and related treatments were not deductible as medical expenses.
The IRS cited the section of the tax code that says cosmetic surgery or similar
procedures are deductible only when they are needed to improve a congenital
abnormality, an accident or trauma, or a disfiguring disease.
In a 1983 case, however, the IRS allowed a father to deduct his transportation
costs when he accompanied his college-age son to a clinic where he received a
sex-change operation.
Levi argues that because gender-identity disorder is a recognized mental
disorder that is generally treated with hormones and surgery, the costs are
legitimate medical deductions.
"Every mental health textbook and medical dictionary recognizes the legitimacy
of both the diagnosis and course of treatment," Levi said.
IRS officials declined to comment, citing the upcoming trial.
Robert Adelson, a Boston tax attorney, said the IRS "might take the position
that you were dealt a particular hand, you are the gender you are, and if you
want to now change the gender, should the government now subsidize you to do
so?"
Others say the IRS has made a mistake.
"The IRS ruling is pure bias, since scientists agree that gender transition
services are medically necessary and not cosmetic," said Joel Ginsberg,
executive director of the Gay and Lesbian Medical Association.
O'Donnabhain (pronounced oh-DON-oh-vin) will not disclose her original name to
protect her family's privacy. She said she struggled with uncomfortable
feelings she could not identify while growing up in an Irish Catholic family.
"There was a definite feeling I wanted to be female, but there was no language
for it," she said. "It was confessions on Saturdays and Mass on Sundays.
We didn't talk about those things."
O'Donnabhain, now 63, served in the Coast Guard, got married, raised three
children and worked as a supervisor at various engineering and construction
jobs, including Boston's colossal Big Dig highway project.
"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."
In 1996, O'Donnabhain began seeing a psychotherapist who eventually diagnosed
her with gender-identity disorder. Five years later, her therapist
recommended sex-change surgery, finding it was a medically necessary. A
psychologist who examined O'Donnabhain concurred.
O'Donnabhain claimed the expenses on her 2001 tax return. The IRS denied
the deduction in 2003.
Kenneth Vacovec, a tax attorney from Newton, said O'Donnabhain could have a
strong case because of the psychological component of gender identity disorder.
"If you were going to a psychiatrist and you had a bipolar condition, and you
were taking medication and getting treatment and it made you function better in
society, how is that different from having a sex-change operation that allows
you to function better and be more comfortable in society?" Vacovec said.
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