Tax Law

Taxpayer v IRS in Sex-Change Claim

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A ground-breaking tax case is scheduled to go to trial next week over an IRS denial of a taxpayer’s medical expense deduction.

Rhiannon O’Donnabhain, 63, wrote off $25,000 in surgery expenses. But the Internal Revenue Service disallowed them, saying that her sex-change operation six years ago, from male to female, was cosmetic, rather than a necessary medical procedure, reports the Associated Press.

O’Donnabhain, a former construction worker and member of the U.S. Coast Guard, could have just repaid the government the disputed $5,000 tax refund she initially received. But the suburban Boston resident says she filed suit as a matter of principle. “This goes way beyond money,” she tells AP. “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.”

Although the IRS has since disallowed the deduction in at least one other case, there has never been a formal ruling on the issue in U.S. Tax Court, says Jennifer Levi. She is a lawyer with Gay & Lesbian Advocates & Defenders, a Boston group that is representing O’Donnabhain.

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