Wednesday, July 18, 2007

IRS holding the line on deducting Plastic Surgery expenses for transgender (sex change) surgery

A $25,000 tax deduction claimed by a Boston man in 2001 for Plastic Surgery to feminize him has been disallowed and is being played out in Federal Tax Court next week. Rhiannon O'Donnabhain is suing the IRS in a case advocates for the transgendered are hoping will force the government to treat sex-change surgery the same as appendectomies, heart bypasses and other deductible medical procedures.

Activists argue that because gender-identity disorder is a recognized disorder in the medical literature, the costs are therefore legitimate medical deductions. This is a patently ridiculous assertion, which looks even more ridiculous in the context of a health care system that is going bankrupt.

Most reasonable people are going to be sympathetic to the psychopathology of transgender individuals, but asking them to subsidize their cosmetic surgery (it is not reconstructive surgery) to self-actualize their body image/identity issue is DOA. The IRS says cosmetic surgery or similar procedures are deductible only when they are needed to improve a congenital abnormality, an accident or trauma, or a disfiguring disease. I wrote a post on the history of plastic surgery and tax deductions last fall here

As many as 2,000 sex change operations are done annually in the United States which can include components such as mastectomy (removal of the breast), feminizing of the face, castration, turning a penis into something resembling female genitalia, and everything in between.

If you want to see some very interesting (but graphic) photos of the surgery for this you can go here and scroll down. The creativity of these kinds of procedures and the skill of the surgeons is really without question. Unfortunately, the number of doctors who do these is dwindling as it's kind of been marginalized as a real small niche within both Plastic Surgery and Urology. Ironically, there's real good money in this area because there's so few doing it and they can charge premium fees for their surgical services. In an era where we're making tough decisions re. what we can and can't afford with health care, I have no problem expecting people to finance these operations themselves.



Anonymous said...

Mr. Oliver,

You’ve put together a generally biased and one sided argument here. Your argument starts by assuming those with gender identity are less deserving of medical help than those you choose to help. Then you claim financial hardship from allowing someone a tax deduction for SRS surgery. Your argument ends with a demeaning cartoon.

Ok, so, let’s assume you are the conservative decider. Do you cover knee replacements for professional football players. Hey, they choose to play football and know the risks. What about the kids who play football? Do you eliminate coverage for skin cancer because it is caused by choosing to be in the sun without screen? You mentioned heart disease. Hmm, as I understand heart disease can be greatly reduced by diet, exercise and not smoking. Is that going to be eliminated in your healthcare coverage? As far as anyone can tell, gender identity issues leading up to the SRS were likely present at birth and not a choice. So, are you suggesting we end coverage for any congenital or hereditary conditions? Whom do you cover and for what ailments?

I pay insurance premiums too. Some of my money goes to other families to store their umbilical cord blood for potential future experimental treatments. Some of my healthcare money goes to other families for fertility treatments. Some of my healthcare money goes to other families for child birthing classes. A lot of my money goes to help cover children I am not related to and do not know. My insurance costs hundreds of dollars a month. Yet, I am denied a standard office visit by Blue Cross Blue Shield because they are biased like you. Am I to be denied all healthcare because of whom I am? I don’t complain about paying my fair share for being part of a compassionate society but I do expect to be fairly treated as part of this society!

You strongly suggest financial ruin for allowing a tax deduction on SRS and suggest the tax deduction will bankrupt healthcare. I also pay taxes!! A tax deduction costs the healthcare system nothing! All the tax deduction means is the government gets less taxes from me one year. Why did you try linking a tax deduction with bankrupting the healthcare system?

The cartoon speaks for itself.


Dr. Rob Oliver said...


My take on this isn't biased, but rather pragmatic. On the list of priorities as a society, these type of procedures are going to be very,very low. It's also going to be much more controversial among large segments of the population.

It is reasonable for what is clearly a cosmetic procedure to be expected to be self-funded by the patient IMO.

Anonymous said...

Pragmatic, my foot! Sir, your argument is based only on your own ingnorance and prejudice - your selection of an insulting cartoon depicting an ugly man in a dress proves that.

Sex Reassignment surgery, or whatever one calls it is NOT a mere "cosmetic" procedure. It is a corrective procedue. A transsexual requires this surgery to enable her to have normal sexual relations. Who is the IRS (or you, for that matter) to blithely declare that it's unessential - the equivalent of Botox or a nose job??? Viagra is deductible for God's sakes! You think that's just fine, I assume.

By your logic, any treatments for rare conditions isn't important to "society", and therefore should not be tax deductible. It's bad enough that transsexuals usually find their surgeries aren't covered under their insurance policies and have to fund them entirely out-of-pocket, but disallowing the tax deduction is adding insult to injury.

Anonymous said...

Mr. Oliver,

You position absolutely is biased and neither pragmatic or educated. Your bias is crystal clear from your assertion SRS is only a “cosmetic procedure”. Hmm, your assertion denies the reality and impact of gender. Were you pragmatic, you would know, in many cases, treating underlying medical issues are far more cost effective compared with superficially treating symptoms with endless costly drugs, therapy and potentially further medical intervention. Ahh, but you are biased and pre-judicially believe SRS to be a superficial treatment. Let me assure you SRS clearly is not superficial! Volumes and volumes of information support my assertion from Doctors whom actually have experience. Perhaps you could read some of those books. Internationally accepted medical Standards of Care include SRS. An uneducated inexperienced person professing superior positions than seasoned experienced professionals is biased thinking.

Once again, you assert your conservative decider status. So, once again I ask, whom do you deem worthy enough for your pre-judicial healthcare system and for? I pay my taxes and my healthcare premiums. I pay dearly and am an American too! This blog discussion is about a tax deduction for healthcare following internationally accepted medical standards of care. Medical standards embraced by the American Medical Association. The vast majority of Americans believe they should be allowed a tax deduction for physician prescribed medical care within the accepted standards of care. Especially when those standards are deemed medically necessary.


Dr. Rob Oliver said...


This is somewhat a circular argument. I support anyone seeking to have these operations, but Medicare, 3rd party payors, and society
(at large) are not going to support underwriting them.

Tax deductions for what most (reasonably) would consider an elective and cosmetic procedure has been an unpersuasive argument to the IRS for nearly all previous claims that were audited with a few notable exceptions.

Believe me, it would be a windfall for Plastic Surgery if people could deduct these expenses for all cosmetic or self-pay, but the rationale being laid out by the transexual community and other activist groups for these surgeries just doesn't sit right when you compare it to other things that have been excluded from similar deductions.

Wolfgang said...

The line between “elective” and “medically necessary” is fuzzy indeed. When it comes to cosmetic surgery, what, exactly, qualifies as a “congenital abnormlity?” A person’s appearance can affect everything from a his mental health to his earning capacity.

That aside, “anonymous” has it right. Many of us trans people are paying into the insurance system and not getting even basic expenses covered in return, things like regular checkups, blood tests, hormone prescriptions, etc.

As I recall, someone did the math and discovered that to cover all the medical expenses, including surgeries, for every transsexual in America would cost each citizen about 35 cents per year. Hardly a threat of bankruptcy.

I might also point out the fact that, technically, the IRS is an illegal organization and no law exists that requires indiivduals to pay income taxes on the labor. Legally, the income tax applies only to businesses, who pay enough to fully fund all goverment activities and programs. What gets deducted from our paychecks actually goes to pay interest to the Federal Reserve banking cartel, anouther illegal organization. So most federal tax deuctions aren’t costing America a single penny.

Anonymous said...

Under the Internal Revenue Code, medical expenses ARE deductible if incurred for the "diagnosis, cure, mitigation, treatment or prevention of disease, or for the purpose of AFFECTING ANY STRUCTURE OR FUNCTION OF THE BODY." Under the Treasury Department's own regulations, they must be incurred "primarily for the prevention or alleviation of a physical or mental defect or illness." - Such as 'acute gender disphoria disorder', or transsexuality.

Thus, according to it's own rules, the IRS must allow the deduction. As you correctly point out, the code prohibits deducting the costs of cosmetic surgery, which it defines as "any procedure which is directed at improving the patient's appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease." (for example, a nose job or face-lift).

Sex Reassignment surgery under this definition is NOT "cosmetic", as it creates a FUNCTIONAL sexual organ, AND ALLOWS THE TRANSSEXUAL INDIVIDUAL TO FUNCTION NORMALLY as a female. You evidently have been under the impression that the surgery is only intended to create a superficial cosmetic "illusion" of female genitalia. This is most emphatically NOT the case! The patient is able to have normal sexual relations as a female.

I just wonder by what expertise or authority do you feel ordained to decree that "3rd party payors, and society(at large) are not going to support underwriting them" - as if that was even the issue! You cling to the notion that this is an 'elective and cosmetic' surgery, which I can tell you first-hand that is most certainly not. Your entire argument is based on that misconception.

Consider this: prior to my surgery, I was not legally female, and so could not marry, my passport, though my name is a female one, and I look, sound and act female, had the "M" gender marker, which had been a source of embarrassment (and even an insult on one occasion). No person has to deal with such things because of small boobs, a hook nose, or bags under their eyes!

What puzzles me is your dogged obstinacy in clinging to that falsehood, as it seems to me that somehow, in spite of several very good "comments" in reply to your original entry, you aren't really interested in knowing the truth of the matter.


Dr. Rob Oliver said...


again you mistake I think what I'm saying. There are very plausible arguments for many medical conditions (particularly in my area) where similar arguments can be made. To date these have gained little traction with the IRS and would have little popular support.

Trying to characterize sex change surgery as functional is a radical reimagination of the differencs between reconstructive and cosmetic surgery. Quantifying the psychologic as something physical is not going to be persuasive I think for society when trying to justify these for others to partially pay for (be it thru insurance, medicare, or by removing federal funds via tax deduction)

911DOC said...

i want to be a hermaphrodite. can you help me? can i deduct it?

obtw, worked for a few years near one of the national centers for gender identity surgery. saw a lot of the post op patients. had a civil rights inquiry filed against me, which was tossed, for ordering a cath ua on a 1 year post op female with urinary tract sx. methinks there is a supra-tentorial problem here and i see that you have already drawn the ire of many. i guess they will come haze me now. oh well.

cut well doc.

TxCub said...

Wow. I'm shocked such condescending, insensitive comments come from supposedly a well educated man. I guess it goes to show you that there is ignorance in every profession.

Anonymous said...

Go hard Doc,
I think your comments are fine.
We have to put an end to being so politically correct6 that we can't express an opinion.
Who wants their tax dollars paying for a guy who thinks he is a girl who wants a tax deduction to buy some new stilettos.

Anonymous said...

Well, ... NO NOT ME, you and Mr. Olliver can just get together and have a mutual... admiration society to console one another, because you are both manifestly wrong.

It is medicly necessary. It is deductible. And by someone spending their own money on such a medicly necessary expense and then deducting the amount from their taxable income, there is no transfer of money from another taxpayer to the transsexual. To claim otherwise is to be ignorant, disingenuous, or both.

It is a given taxpayer simply keeping more of their own money for their own purposes, rather than sending it to the federal government for them to waste, by using long established IRS tax law. How is that any different from the rich hiring tax attorneys to construct tax shelters to lower their tax liability/burden?

Oh! I forgot, you're not biased against rich people, just transsexuals.