WashingtonPost.com – By Anthony Faiola – Washington Post Staff Writer
New York — 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 Internal Revenue Service 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?