U.S. Tax Court says transition surgery medically necessary and tax deductible
Feb 4th, 2010 by Afiya
The U.S. Tax Court has issued a decision that could benefit some members of the transgender and transsexual communities at tax time, with the potential for an even more significant impact on trans medical care in general.
The Gay & Lesbian Advocates & Defenders (GLAD) reports that the Court handed down a ruling on February 2, 2010, in the case of O’Donnabhain v. Commissioner of Internal Revenue that treatment for gender identity disorder qualifies as medical care under the Internal Revenue Code and is therefore tax deductible.
The case began in 2002, when Rhiannon O’Donnabhain deducted costs relating to transition surgery on her federal tax forms. When she was later audited, those deductions were denied because the surgery was deemed cosmetic.
GLAD helped her appeal the decision, and the case went through a series of actions before progressing to the U.S. Tax Court. A trial was held in 2007, more legal filings ensued, and the Court then issued its final decision in the case — that the surgery costs were an allowable medical expense.
This finding is especially important because the U.S. Tax Court, with its decision, has officially acknowledged that surgery for transition is a medical necessity. The ruling could eventually affect how insurance companies deal with such surgeries.
Currently, most insurance companies do not cover transition surgery, arguing that it is cosmetic. This ruling makes it clear that just the opposite is true.
Get more information on the case on GLAD’s Web site.
GLAD is New England’s leading legal rights organization dedicated to ending discrimination based on sexual orientation, HIV status and gender identity and expression. Since 1978, through impact litigation and public education, GLAD has worked to create a better world for lesbians, gay men, bisexual, and transgender individuals and people living with HIV.
