Rhiannon O’Donnabhain via GLAD

In a precedent-setting decision that could affect thousands, the US Tax Court ruled Tuesday that treatment for gender identity disorder (GID), including sex-reassignment surgery, qualifies as medical care and is therefore tax-deductable.

The case was brought on behalf of Rhiannon O’Donnabhain after the IRS in 2003 disallowed the $5000 deduction O’Donnabhain had claimed for the $25,000 cost of gender-identity treatments and sex-reassignment surgery.

O’Donnabhain sued after an IRS auditor ruled that her treatment was not tax-deductable because it had been merely “cosmetic”, Washington Post reported in 2007.

In yesterday’s ruling, the tax court said the IRS position was “thoroughly rebutted by the medical evidence.”

In an Wednesday interview, O’Donnabhain said, “The tax court has spoken for my community and has supported my community by saying that this is a proper medical deduction, much the same as an appendectomy or open heart surgery”, Associated Press reports.

“It certainly is not cosmetic surgery as the IRS contended,” she said.

Represented by attorneys from Boston-based Gay and Lesbian Advocates and Defenders (GLAD), O’Donnabhain began the drawn-out process of appealing the auditor’s 2003 ruling.

Gender identity disorder treatment is tax deductable, court rules [contd.]

A trial on the case was held before the tax could in July and August, 2007.

During a Wednesday conference call with reporters, GLAD senior staff attorney Karen Loewy called the court’s decision “incredibly significant”, AFP reports.

“This is the first time that a court that has jurisdiction nationally reaches such a conclusion,” Loewy said.

GLAD told Associated Press yesterday that the decision could potentially affect thousands of people a year in the US who undergo similar treatment.

“I think what the court is saying is that surgery and hormone therapy for transgender people to alleviate the stress associated with gender identity disorder is legitimate medical care,’’ said Jennifer Levi, a GLAD attorney, told AP yesterday.

In a 2007 GLAD statement about the case, Loewy said, “Rhiannon O’Donnabhain deserves to be treated equally with every other hard-working American taxpayer.”

“With every mainstream medical authority from the American Psychiatric Association to the National Institutes of Health recognizing GID and its treatment, it’s ludicrous to call this surgery cosmetic,” Loewy said prior to the tax court trial.

GLAD attorney Bennett Klein told the Washington Post in 2007, “I think what's clear here is that the IRS is making a political decision on what should have been an obvious medical deduction. You can’t set different standards for a person’s health; IRS agents should not be in a position of second-guessing health-care professionals.”

In yesterday’s ruling, the tax court agreed.

“The evidence amply supports the conclusions that petitioner suffered from severe GID, that GID is a well-recognized, and serious mental disorder, and that hormone therapy and sex reassignment surgery are considered appropriate and effective treatments for GID by psychiatrists and other mental health professionals who are knowledgeable concerning the condition,’’ the court said in its ruling, according to Associated Press.

O’Donnabhain grew up in a quiet, close-knit Irish Catholic family on Boston’s South Shore, according to a biography from GLAD [pdf]. Although Rhiannon had conflicted feelings about her anatomical gender even in elementary school, she tried hard to fit into the expected male role. After college, Rhiannon, who is now 65, enlisted in the Coast Guard during the Vietnam war. She later worked in construction and as an engineer. She married and fathered three children.

But, though it all, she felt tormented, until she finally began seeing a therapist in 1996. After evaluation, her therapist diagnosed diagnosed her with gender identity disorder (GID). GLAD notes in its biography of O’Donnabhain that medical professionals characterize GID as “a persistent conflict between a person’s birth sex and their gender identity.”

For Rhiannon, the diagnosis meant that after a lifetime of feeling utterly alone and misunderstood, she finally had a language for what she had experienced since childhood. More than that, there was a prescribed course of treatment—and hope that at last she could feel better.

She took her treatment one step at a time, starting with regular counseling and eventually undertaking hormone therapy. Later, she “came out” as transgender to her family and coworkers, legally changed her name, and presented as female in every aspect of her life. Finally, in 2001, after she and her health care providers determined that surgery was critical to enable her to live her life as a woman, she underwent several surgeries as part of her course of transition.