Healthcare News & Insights

Transgender surgery deemed medically necessary — by a tax court

A U.S. Tax Court has ruled that gender reassignment surgeries are medically necessary — not cosmetic.

The ruling comes after a nine-year fight by Rhiannon O’Donnabhain to have her sex change operation and related procedures approved as a deductible medical expense. O’Donnabhain tried to deduct just under $6,000 in expenses for the surgery, breast augmentation and hormone therapy on her 2001 taxes.

IRS denied the deduction, claiming the procedures were solely cosmetic and that her diagnosis of gender identity disorder (GID) was “not a significant psychiatric disorder” and was just a “social construction.” She fought the decision.

This month, the tax court ruled that the hormone therapy and surgery were deductible, as treatment for her GID. But the breast augmentation was disallowed, as a cosmetic procedure.

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