U.S. Tax Court Rules in Favor of SRS Deduction


On February 2, 2010, the U.S. Tax Court ruled for the first time that treatment for gender identity disorder qualifies as medical care under the Internal Revenue Code, and is therefore tax deductible.  We congratulate our friends at GLAD and plaintiff Rhiannon O’Donnabhain on this important victory.

The decision came in the case In re Rhiannon O’Donnabhain.  In April 2002, Ms. O’Donnabhain deducted costs related to her sex reassignment when submitting her federal tax forms.  She received her tax refund in June 2002, but six months later she was audited by the IRS.  After an initial indication by an Appeals Officer to allow the deduction, the local IRS office decided to seek a decision from Washington. The IRS Chief Counsel issued an Advice Letter on October 14, 2005, denying the deduction and the matter progressed to US Tax Court, where trial took place July 24 – August 23, 2007.

"Transgender health care is health care, plain and simple," said TLDEF executive director Michael Silverman.  "The court's decision stands for the core proposition that the IRS must treat all taxpayers equally when it comes to medically necessary health care, including health care related to gender transition."