In a long-awaited decision, a fractured (8-5-3) Tax Court today ruled in O’Donnabhain v. Commissioner, 134 T.C. No. 4 (Feb. 2, 2010), that male-to-female gender reassignment surgery qualifies as a deductible medical expense under § 213, reversing the IRS's position in Chief Counsel Advice 200603025. The 8-judge majority held that:
- TP's gender identity disorder is a “disease” within the meaning of § 213(d)(1)(A) & (9)(B).
- TP's hormone therapy and sex reassignment surgery were for the treatment of disease within the meaning of § 213(d)(1)(A) & (9)(B), and thus not “cosmetic surgery” excluded from the definition of deductible “medical care” by § 213(d)(9)(A).
- TP's breast augmentation surgery was directed at improving her appearance did not meaningfully promote the proper function of her body or treat disease within the meaning of § 213(d)(9)(B), and thus was “cosmetic surgery” excluded from the definition of deductible “medical care” by § 213(d)(9)(A).
Judge Gale wrote the 69-page majority opinion, joined by Judges Cohen, Colvin. Marvel, Morrison, Paris, Thornton, and Wherry. Judge Halperin (12 pages), Judge Holmes (joined by Judge Goeke) (23 pages), and Judge Goeke (joined by Judge Holmes) (6 pages) wrote separate concurring opinions. Judge Foley (joined by Judges Gustafson, Kroupa, Vasquez, and Wells) (8 pages) and Judge Gustafson (joined by Judges Foley, Kroupa, Vasquez, and Wells) (21 pages) wrote separate opinions concurring in part and dissenting in part.
Prior TaxProf Blog coverage:
- IRS Denies Medical Expense Deduction for Costs of Gender-Reassignment Surgery (Jan. 23, 2006)
- Tax Court to Decide Deductibility of Sex-Change Operation (July 18, 2007)
- IRS: Why Cost of Gender Reassignment Surgery Is Not a Deductible Medical Expense (Oct. 2, 2007)
- Tax Court to Decide Deductibility of Sex-Change Operation (Oct. 2, 2007)
- NPR on Deductibility of Sex-Change Operation (Oct. 17, 2007)
Update:
