In a closely-watched case, the United States Tax Court overwhelmingly ruled on Tuesday in O'Donnabhain v. Commissioner of Internal Revenue that a transgender woman's medical expenses for hormone therapy and sex reassignment surgery were medically necessary and therefore tax-deductible under Federal law. After considering extensive medical evidence and testimony from leading medical experts, the court rejected an interpretation of the law that would consider transgender people's medical treatment different than all other medically necessary treatment recommended by major medical and psychological organizations.
"Finally, we have recognition from the courts of what transgender people and our medical providers have known all along-that transition related care is absolutely necessary health care for the wellbeing of many transgender people," said Mara Keisling, the Executive Director of the National Center for Transgender Equality. "Being able to deduct a portion of costly medical treatments will make it more affordable for transgender people to follow through with the care their doctors prescribe. For the IRS to treat transgender people and non-transgender people differently was discrimination, plain and simple, and now that has ended."
The court's decision does not mean that all medical treatments and procedures associated with gender transition will be tax-deductible. Like all other medical treatments, deductibility will be based on the medical necessity of the treatment as determined by qualified medical providers in accordance with recognized clinical standards of care. The court recognized, as have the American Medical Association, American Psychological Association and many others, based on overwhelming medical evidence, that transition-related health care is non-cosmetic, medically necessary healthcare.
The case stems from a decision by the IRS to reject Rhiannon O'Donnabhain's deduction of her expenses for sex reassignment surgery in 2001 from her federal income tax. The case went to trial in 2007. Ms. O'Donnabhain was represented by the Transgender Rights Project of Gay & Lesbian Advocates & Defenders (GLAD).
NCTE applauds GLAD's groundbreaking and powerful work and perseverance to win this important victory, and thanks Rhiannon O'Donnabhain for her willingness to stand up and challenge the inequity of the IRS's policies. Her courage and determination will have an impact on the health of transgender people around our country for many years to come.
CONFERENCE CALL TONIGHT
Hear more about the case NCTE is joining GLAD in a community conference call GLAD is hosting tonight (Wednesday) February 3 at 6PM EST / 3PM PST. Attorneys who worked on the case will be on the call explain the case and its ramifications for transgender people.
For call in information, visit www.TransEquality.org/news.html