## Facts

- Rhiannon G. O’Donnabhain, a transgender woman, was diagnosed in 1997 with gender identity disorder (GID), a condition recognized in medical reference texts and associated with persistent distress about anatomical sex.
- Medical providers treated her using a commonly described regimen for severe GID: feminizing hormone therapy, living full-time as female, and (after at least a year) sex reassignment surgery; some protocols may include breast surgery in certain circumstances.
- O’Donnabhain began feminizing hormones in 1997, transitioned to presenting full-time as female after facial feminization surgery in 2000, and in 2001 underwent genital sex reassignment surgery and breast augmentation.
- On her 2001 federal income tax return, she claimed a medical expense deduction under I.R.C. § 213 for feminizing hormones, sex reassignment surgery, and related transportation and expenses.
- The IRS disallowed the claimed deduction, asserting the procedures were “cosmetic,” did not treat a “disease” or “illness,” and were excluded from “medical care” by the cosmetic surgery limitation in § 213(d)(9).
- O’Donnabhain petitioned the U.S. Tax Court to redetermine the asserted deficiency.

## Issues

1. Whether GID qualifies as a “disease” for purposes of I.R.C. § 213(d)(1)(A) and the cosmetic-surgery exclusion in § 213(d)(9).
2. Whether feminizing hormones and genital sex reassignment surgery were paid for the “diagnosis, cure, mitigation, [or] treatment” of disease, or instead were excluded “cosmetic surgery” under § 213(d)(9).
3. Whether breast augmentation was medical care treating GID or excluded cosmetic surgery directed at improving appearance.

## Decision

- The Tax Court held that GID is a “disease” for purposes of § 213.
- The court allowed deductions for expenses for feminizing hormone therapy and genital sex reassignment surgery because they were paid for the treatment of GID and therefore constituted “medical care,” not excluded cosmetic surgery.
- The court disallowed deductions for breast augmentation expenses because the procedure was directed at improving appearance and the record did not show it meaningfully promoted bodily function or treated disease within § 213(d)(9).

## Legal Principles

- Under I.R.C. § 213(d)(1)(A), “medical care” includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, and for affecting any structure or function of the body.
- I.R.C. § 213(d)(9) excludes “cosmetic surgery” from “medical care” when the procedure is directed at improving appearance and does not meaningfully promote proper bodily function or prevent or treat illness or disease.
- Section 213 does not categorically exclude mental health conditions from the definition of “disease”; a condition recognized as a serious medical impairment can qualify.
- Procedures that alter appearance may still be deductible medical care when performed to treat a qualifying disease; the cosmetic-surgery exclusion applies when the taxpayer fails to establish treatment of disease or meaningful functional benefit.

## Conclusion

The Tax Court concluded that GID is a disease under § 213 and that medically accepted treatment—feminizing hormones and genital sex reassignment surgery—can be deductible medical care, while disallowing a deduction for breast augmentation where the taxpayer did not prove it treated the disease or meaningfully improved bodily function and the procedure was therefore cosmetic under § 213(d)(9).


O’Donnabhain v. Commissioner, 134 T.C. 34 (2010)