Major Victory For Transgender People

Commentary by Boyce Hinman
A federal tax court has issued a ruling which, if it stands, will be a major victory for transgender people. The court ruled that people who undergo sex reassignment surgery may claim the cost of the surgery as a tax deductible medical expense on their federal tax return.

The court said Gender Identity Disorder (GID) is an actual disease, as defined by the Internal Revenue Code. It also said hormone therapy, and sex reassignment surgery, are valid forms of treatment for that disease, and the costs of such care are deductible under the Internal Revenue Code.

This case began when a transgender person in Massachusetts, Rhiannon O’Donnabhain, underwent sex reassignment surgery in 2001. She then claimed the cost of the procedure as a deductible medical expense on her federal tax return. But the IRS refused to allow the deduction. O’Donnabhain then went to court to appeal their decision.


The tax court said O’Donnabhain could claim the cost of hormone therapy and of sex reassignment surgery. It did refuse to allow a deduction for the cost of breast enhancement surgery. The court said her breast augmentation surgery was directed at improving her appearance and she had not shown that the surgery either meaningfully promoted the proper function of the body, or a treated a disease, within the meaning of the Internal Revenue Code.

According to a spokesperson at the tax court, the federal government has 30 days from the day the decision is entered to appeal the decision. If no appeal is submitted by mid March, the decision will be final and others can claim sex reassignment surgery, and hormone therapy, as a deductible medical expense on their federal tax return.

A contact at the California Franchise Tax Board says California law conforms to federal tax law on this point and so, if the tax court decision is finalized, transgender people in California would be permitted to submit sex reassignment surgery, and hormone therapy, costs as deductible expenses on both their federal and state income tax returns.

It is possible to submit federal amended tax returns for the past three years, and amended California returns for the past four years. Thus, if people had their surgery prior to 2009, it might still be possible to claim the cost of the surgery as a medically deductible expense. However, you should consult a tax attorney or other qualified tax expert before trying this.

Similarly one should not assume that any claim for sex reassignment surgery will be approved by the IRS. To succeed with such a claim, the person must have clear documentation that he or she suffers from Gender Identity Disorder and that the surgery was necessary to the treatment of the disorder. Medical verification of these facts would be necessary.

A copy of the tax court decision is available online at under LGBTI issues.

Boyce Hinman is the founder of the California Communities United Institute and can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it


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