Human Nature

Trans Figure

Should sex-change surgery be tax-deductible?

Rhiannon O’Donnabhain felt like a woman trapped in a man’s body. So she changed her body. She hired a surgeon to turn her scrotum * and penis into a vagina and clitoris. She got hormones and additional surgery to make her breasts look like a woman’s. Then she did something really ballsy: She wrote off these expenses—about $20,000—on her tax return. The IRS told her to stuff it. So she went to court.

O’Donnabhain said she took the hormones and got the surgery to treat gender identity disorder, a certified psychiatric illness. The IRS didn’t buy it. The agency dismissed GID as a “social construction.” It said her procedures were done to adjust her appearance, not to fix a physical defect. Therefore, the IRS argued, her expenses were cosmetic, not medically necessary.

This month, the U.S. Tax Court decided the case. Guess what? The transsexual beat the tax man. The court concluded that altering your appearance to make yourself socially comfortable can be medically necessary and therefore tax-deductible.

Under the law, you can deduct appearance-altering expenses only if they’re for treating a “disease.” The IRS wanted to define this term narrowly. To be a disease, the agency argued, a condition must be traced to “a pathological process … within the individual” based on “abnormal structure or function of the body at the gross, microscopic, molecular, biochemical, or neuro-chemical levels.” That definition would rule out sex-reassignment surgery, since research has yet to establish a biological cause of GID.

The definition is intuitively appealing. It sounds hard-nosed and scientific, separating the palpable pains of the body from newfangled diagnoses of the mind. But the definition itself is newfangled. For more than half a century, courts, Congress, and regulators have categorized mental disorders as diseases without regard to what caused them. You can argue that Congress was stupid to think this way. But in determining legislative intent, all that matters is what Congress thought. So the Tax Court rejected the IRS’s definition as an anachronism. “It is virtually inconceivable that Congress could have intended to confine [deductibility] to conditions with demonstrated organic origins when it enacted the provision in 1942,” the court concluded, “because physiological origins for mental disorders were not widely recognized at the time.”

So where does that leave us? If physiological origins don’t define disease, what does? The court’s answer seems to be functional impairment. “GID is a serious, psychologically debilitating condition,” the judges declared. They cited previous rulings that “found mental conditions to be ‘diseases’ where there was evidence that mental health professionals regarded the condition as creating a significant impairment to normal functioning.” One such case involved treatment of emotional stress that disrupted a patient’s “ability to cope in a normal academic environment.” Another case centered on a patient’s lack of psychological “mechanisms necessary for dealing maturely, realistically and in an organized fashion, with the problems of his environment.”

Disease, from this standpoint, consists of a mismatch between your demeanor and your environment. Instead of adjusting the environment, we adjust you. If talk therapy can’t fix you, we try drugs. If drugs can’t fix you, we try surgery.

To most of us, sex-reassignment surgery sounds crazy. Why cut up your body to fit your mind? Can’t we persuade your mind to fit your body? The answer, apparently, is no. We may think problems are easier to solve when they’re “all in your head,” but in this case, the mind is harder to change than the body. The court, citing expert testimony and the judgments of three other high-level courts, found no instance in which psychotherapy alone had effectively treated severe GID.

Furthermore, while GID might begin in your head, it doesn’t end there. On this point, the evidence is chilling. “All three expert witnesses agreed that, absent treatment, GID in genetic males is sometimes associated with autocastration, autopenectomy, and suicide,” the court noted. Mental illness is physically dangerous for the simplest of reasons: The mind can decide to mutilate the body. So the question isn’t whether to cut up the bodies of patients with severe GID. The question is who will do the cutting.

This isn’t the first time we’ve rationalized radical surgery as a psychological necessity. Fourteen months ago, doctors at the Cleveland Clinic justified a face transplant on the grounds that people with extensively damaged faces were “socially crippled.” But face transplants are extremely rare. Sex-reassignment surgery is relatively common. By some estimates, it’s performed on 1,600 to 2,000 people in this country each year. These people can now line up not just for tax deductions but for coverage under Medicaid, private insurance, and prison health care, all of which have been upheld by courts.

And there’s no reason to think the redefinition of medically necessary procedures will end here. Under the medical standards affirmed by the tax court, male-to-female transsexuals are entitled to breast augmentation surgery when hormone treatment has failed to give them breasts “sufficient for comfort in the social gender role.” The court decided O’Donnabhain’s hormonally enhanced breasts had been adequate before her surgery, citing her doctor’s pre-operative description of them as “approximately B cup breasts with a very nice shape.” But if the standard of adequacy is the patient’s social comfort, why does cup size or a doctor’s aesthetic opinion settle the question? Lots of women with B-cup breasts think they need D-cup breasts to feel comfortable in their gender role. Should their surgery be tax-deductible?

And why stop at chest level? O’Donnabhain also got surgery to feminize her face. The IRS attributed this to her preoccupation with appearance rather than disease. But the Tax Court disagreed. The facial surgery “may have served the same therapeutic purposes as (genital) sex reassignment surgery and hormone therapy; namely, effecting a female appearance in a genetic male,” the judges wrote. After all, they reasoned, “passing as female is important to the mental health of a male GID sufferer.”

Passing as female, effecting an appearance, feeling comfortable in a social gender role. These are not conventional health care objectives. They’re the evolving frontiers of an expanding conception of medical necessity. The tax-deductibility of sex-reassignment surgery is just the latest conquest in this expansion. It won’t be the last.

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* Correction, Feb. 16, 2010: I originally wrote that O’Donnabhain had surgery to turn her testicles and penis into a vagina and clitoris. I meant scrotum and penis. A hilariously stupid goof. Thanks to Slate commenter MBS MD for the catch. (Return to top.)