After years of painful soul searching, Rhiannon O'Donnabhain -- a former construction engineer from a devout Irish Catholic family in Boston -- decided to surgically change his sex to female in 2001. The struggle was equally tough financially -- hormone treatments and medical procedures set her back $25,000, a burden she felt could be partially offset by taking a $5,000 tax deduction for medical costs.
When she sent in her tax claims after the surgery, the IRS initially issued the 64-year-old former Coast Guard reservist a refund check for $5,000. But soon after, she was audited and ordered to return the refund because the IRS had determined that her surgery had been merely "cosmetic" -- and therefore not tax deductible.
Rather than return the money, O'Donnabhain opted to sue the IRS. The result has been a riveting case -- the first of its kind in normally staid U.S. Tax Court -- in which lawyers have just concluded oral arguments and are set to present a new round of written briefs next month. The core question is this: Should changing your sex be tax deductible?
The answer, according to leading medical experts, is an unequivocal yes. In fact, O'Donnabhain's treatment by the government has sparked outrage among medical professionals who specialize in gender identity disorder, a condition that leads an estimated 1,000 to 2,000 Americans a year to undergo sex-change operations.
"When did the IRS suddenly become physicians?" said Marshall Forstein, associate professor of psychiatry at Harvard Medical School. "It's absolutely clear that transgender identity is a condition discussed in diagnostic manuals. It seems the IRS is now in the business of practicing medicine without a license."