Rhiannon O'Donnabhain finally got the tax break she deserved from the IRS in 2001.
Tuesday, Federal Tax Court ruled in favor of the petitioner, a transsexual woman in the landmark case of O'Donnabhain v. Commissioner of Internal Revenue. The favorable ruling opens the doors wide to tax equality for transgender Americans.
Citing protocol from Harry Benjamin/WPATH Standards of Care and DSM-IV, the court ruled that medical treatment for gender identity disorder (GID) qualifies as tax deductible medical care under the Internal Revenue Code.
In 2001, O'Donnabhain underwent sex reassignment surgery (SRS). She claimed the cost of surgeries, transportation and related expenses in the same tax year as a medical expense deduction under section 214, I.R.C.
The medical deduction was rejected by the IRS.
In the landmark victory won by Gay & Lesbian Advocates & Defenders (GLAD) the court rejected an argument by the IRS that transgender medical treatment is different than medically necessary treatment recommended by recognized medical and psychological organizations.
The U.S. Tax Court decision has huge financial ramifications for transgender Americans, opening the door to potential deductions in other related areas of transition as defined under the Standards of Care.
The Harry Benjamin Standards of Care for GID prescribe a "triadic" treatment sequence including 1) cross-gender hormone therapy to effect changes in physical appearance toward the opposite sex; 2) "real-life" experience described as a trial period of living full time in society as a member of the opposite sex and 3) sex reassignment surgery including non-genital surgical sex reassignment.
Non-genital surgical sex reassignment refers to any and all other surgical procedures of non-genital, or non-breast, sites (ie: nose, throat, chin, cheeks, hips, etc.) conducted for the purpose of effecting a more masculine appearance in a genetic female or for the purpose of effecting a more feminine appearance in a genetic male in the absence of identifiable pathology which would warrant such surgery regardless of the patient's genetic sex.
More than 80% of all transgender individuals never transition in large part due to discriminatory health care insurance practices which typically exclude treatment for gender identity disorder (GID).
The full scope of transition---gender counseling, hormone therapy, medical supervision, hair removal, genital, facial and body surgeries--can easily exceed $50,000, in some cases over $100,000.
Since "non-genital sex reassignment procedures" often are performed together as facial feminization surgery (FFS) for trans-women it's logical to extrapolate that these procedures could be in line to qualify as medically necessary tax deductions.
The court case and it's ramifications on the transgender community will be the topic of a conference call tonight at 6pm Eastern hosted by GLAD.