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IRS denies sex-change writeoff

Ex-construction worker sues US

Rhiannon O'Donnabhain helped raise three children and worked on the Big Dig. Rhiannon O'Donnabhain helped raise three children and worked on the Big Dig. (JOSH REYNOLDS/ASSOCIATED PRESS)

After a tormented existence as a father, a husband, a Coast Guardsman, and a construction worker, a 57-year-old suburban Boston man underwent a sex-change operation. And then she wrote off the $25,000 in medical expenses on her taxes.

But the IRS disallowed the deduction, ruling the procedure was cosmetic, not a medical necessity, in a potentially precedent-setting dispute now before the US Tax Court.

Rhiannon O'Donnabhain is suing the IRS in a case that advocates for the transgendered are hoping will force the tax agency to treat sex-change operations the same as appendectomies, heart bypasses, and other deductible medical procedures. The case is set to go to trial July 24.

An estimated 1,600 to 2,000 people a year undergo sex-change surgery in the United States, according to the Gay and Lesbian Medical Association.

O'Donnabhain, now 63, served in the Coast Guard, got married, helped to raise three children, and worked as a supervisor at various engineering and construction jobs, including the Big Dig highway project. O'Donnabhain said she could have paid back the approximately $5,000 she received in her tax refund, but decided to challenge the IRS because she believes the ruling against her was rooted in politics and prejudice.

"This goes way beyond money," O'Donnabhain said in an interview with the Associated Press. "If I were to give the money back, it would be saying it's OK for you to do this to me. It is not OK for them to do this to me or anyone like me."

The federal Tax Court has never issued an opinion in a similar case, said Jennifer Levi, a lawyer with Gay & Lesbian Advocates & Defenders, the Boston-based legal organization representing O'Donnabhain.

But the IRS has ruled against allowing the deduction in at least one other case. In a 2005 case, the IRS ruled the costs of a woman's gender reassignment surgery and related treatments were not deductible as medical expenses. The IRS cited the section of the tax code that says cosmetic surgery or similar procedures are deductible only when they are needed to improve a congenital abnormality, an accident or trauma, or a disfiguring disease.