Tax court decisions

IRS to Allow Deduction of Medical Expenses for Those Diagnosed with Gender Identity Disorder

When nature makes a mistake, it can be expensive to repair. Rhiannon O’Donnabhain long suspected that nature had mistakenly assigned him to the wrong team, and after growing up male, fathering three children, and getting divorced, looked into fixing that. A diagnosis of Gender Identity Disorder (GID) was reached, and the process began.


There was a lot involved. The Tax Court says the process included:

– 20 weekly individual therapy sessions.
– Hormone therapy
– facial surgery
– genital surgical sex reassignment
– breast augmentation surgery

This process continued under the watchful (but not free) observation of a therapist.

Now female, O’Donnabhain deducted $21,741 in medical expenses related to the reassignment on her 2001 return. The IRS objected, but the Tax Court upheld her medical deductions for all but the breast augmentation (they said that was cosmetic, not medical).

The expert testimony also establishes that given (1) the risks, pain, and extensive rehabilitation associated with sex reassignment surgery, (2) the stigma encountered by persons who change their gender role and appearance in society, and (3) the expert-backed but commonsense point that the desire of a genetic male to have his genitals removed requires an explanation beyond mere dissatisfaction with appearance (such as GID or psychosis), petitioner would not have undergone hormone therapy and sex reassignment surgery except in an effort to alleviate the distress and suffering attendant to GID. Respondent’s contention that petitioner undertook the surgery and hormone treatments to improve appearance is at best a superficial characterization of the circumstances that is thoroughly rebutted by the medical evidence.

Now the IRS has changed its mind. In an Action on Decision published yesterday the IRS said that they will follow the Tax Court’s decision and will allow gender reassignment costs as a medical deduction for diagnosed GID.

Unfortunately, there still is no known medical fix for Accountants Personality Disorder. Medicine remains helpless to treat the many rock stars trapped in CPA personalities.

For the Last Time, Only Tim Geithner Can Blame TurboTax and Get Away with It

Seriously people. We thought that the fog of confusion around this issue had been lifted. We’ll go over it again for those of you just joining us.

If you are not a well-connected bureaucrat with a fabulous coif, you are not afforded the same privileges as though who are/do.

And tax court debunks the latest attempt to draw some likeness between a regular schmo and T Geith:

We shall address briefly petitioner’s contention that the IRS granted “favorable treatment” in a case involving U.S. Secretary of the Treasury Timothy Geithner, which petitioner described as “incredibly similar” to the instant case. According to petitioner, “there should not be different, or favorable rules for the well-connected”. The record in this case does not establish any facts relating to the case to which petitioner refers involving U.S. Secretary of the Treasury Timothy Geithner. In any event, those facts would be irrelevant to our resolution of the issue presented here. Regardless of the facts and circumstances relating to the case to which petitioner refers involving U.S. Secretary of the Treasury Timothy Geithner, petitioner is required to establish on the basis of the facts and circumstances that are established by the record in his own case that there was reasonable cause for, and that he acted in good faith with respect to, the underpayment for each of his taxable years 2005 and 2006 that is attributable to his failure to report self-employment tax.

Turbo Tax

Tax Court Rejects Geithner/TurboTax Defense [TaxProf]