A memo out of the Internal Revenue Service's Office of Chief Counsel makes the case that gender reassignment surgery cannot be deducted as a medical expense for tax purposes.

The case, involving male-to-female gender reassignment surgery, is currently under consideration by the IRS Office of Appeals, which requested advice on the matter in February 2005.

The advice memorandum says that the taxpayer deducted an unspecified amount in expenses -- including payments for various doctors, hormone treatments, psychotherapy, health insurance, transportation and lodging in connection with the surgery. Although the taxpayer appears to have offered extensive medical and legal documentation behind the decision to have the procedure, the chief counsel opinion offers legal support for the original IRS revenue agent defining the procedure as cosmetic.

The memo cites 1990 Senate legislation that sets limits on the definition of cosmetic surgery, saying deductions are not allowed for "any procedure which is directed at improving the patient's appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease." The memo finds that under the Senate's definition, the taxpayer did not meet either of two burdens.

The expenses also were not incurred for treatment of a disfiguring condition arising from a congenital abnormality, personal injury, trauma or disease (such as reconstructive surgery following the removal of a malignancy).

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