Former construction worker and Coast Guard employee Rhiannon O’Donnabhain is suing the Internal Revenue Service after she was disallowed from deducting $25,000 in medical expenses for her sex change operation.The IRS claims the operation was cosmetic surgery and not a medical necessity. In another case in 2005, the IRS Chief Counsel made a similar determination. However, the United States Tax Court has not ruled on any similar cases, and its decision could set a precedent.
O’Donnabhain’s attorneys argue that she suffered from gender identity disorder, a medical condition usually treated with either hormones or surgery, so her medical expenses should count as legitimate deductions.
They point out that O’Donnabhain saw a psychotherapist and a psychologist who both told her the sex change surgery was medically necessary. She had the procedure done in 2001 and the IRS disallowed the deduction in 2003, asking her to send back her $5,000 tax refund, which she refused. The trial is set for July 24.
