Tip of the hat to Paul Caron's TaxProf blog for pointing out the AP story on an upcoming Tax Court case to determine the validity of the IRS position that sex-change surgery is a choice, like cosmetic surgery, rather than a deductible medical expense like psychiatric care or diabetes treatment.
In an administrative ruling, the IRS has maintained that sex-change surgery was not intended to be a covered medical expense. See this earlier ataxingmatter post. As I noted there, the single authority on sex-change surgery quoted in the IRS chief counsel memorandum is Paul McHugh, a vatican expert who has fought tooth and nail to prevent acceptance of sex-change surgery for a mixture of religious a and pseudo-medical reasons and hence does not appear to offer an impartial assessment of the need for the procedure. The post includes links describing the nature of sex-change surgery. I concluded that "[t]he difference between gender reassignment surgery and a face lift should be obvious to all. People who have such surgery face a difficult life if they cannot make their bodies mesh with their gender identity. If cosmetic surgery after an accident scars a face is deductible, then so should this be."
Kenneth Vacovec, a Newton tax attorney, is quoted in the AP story in a similar statement.
"If you were going to a psychiatrist and you had a bipolar condition, and you were taking medication and getting treatment and it made you function better in society, how is that different from having a sex-change operation that allows you to function better and be more comfortable in society?"
This is one instance in which the IRS's administrative position should be overturned. Sex-change surgery is not treated by doctors as a purely elective surgery like cosmetic surgery, and that should be the determining feature for deductibility as medical care.
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