Feb. 2, 2010. The U.S. Tax Court today issued a long-awaited decision in O’Donnabhain v. Commissioner of Internal Revenue, ruling that treatment for gender identity disorder (GID) qualifies as medical care under the Internal Revenue Code, and is therefore deductible.

“This decision treats Rhiannon O’Donnabhain the way she deserves to be treated—like any hard-working American taxpayer with medical expenses,” said Karen Loewy, senior staff attorney with Gay & Lesbian Advocates & Defenders (GLAD), which represented Ms. O’Donnabhain.

“From the start, this has been a no-brainer.  Every mainstream medical authority from the American Psychiatric Association to the National Institutes of Health recognize the legitimacy of providing medical care for transgender people.  Dismissing these medical expenses as illegitimate and not deductible was discrimination, pure and simple.”

In an opinion reviewed by the full bench, the United States Tax Court affirmed that medical treatments for GID, including surgery and hormone therapy, are deductible medical expenses.  Moreover, the Court stated that the IRS’s position that such treatment is cosmetic in nature “is at best a superficial characterization of the circumstances that is thoroughly rebutted by the medical evidence.”

“I’m overjoyed, not only for me, but for other transgender people,” said Ms. O’Donnabhain.  “We deserve respect, equal treatment for our medical care, and fair treatment by our government.”

Born biologically male, Rhiannon O’Donnabhain began having conflicted feelings about her gender identity as early as age 8.  After decades of deep suffering, O’Donnabhain was diagnosed in 1996 with GID and undertook a course of professionally prescribed medical treatments that included her 2001 sex reassignment surgery.  She claimed the cost of her treatment as a deductible medical expense on her federal income tax return – but the Internal Revenue Service said no, calling the surgery “cosmetic.”

The trial in O’Donnabhain v. Commissioner of Internal Revenue began on July 24, 2007 in Boston, and concluded with post-trial briefing in March 2008.  At the trial, Ms. O’Donnabhain testified about her life-long struggle with her gender identity, and her health care providers testified that the treatment was critical to her mental health and ability to function at all levels.  Experts testified about Gender Identity Disorder and its treatment.

Ms. O’Donnabhain paid approximately $25,000 out-of-pocket for her care, including therapy, hormone treatment, and surgery.  The amount of the deduction she is seeking from the IRS is about $5,000.

“In this landmark ruling, the Tax Court affirmed the consensus position of the medical establishment that transition-related medical care is essential for many transgender people,” explained Jennifer Levi, Director of GLAD’s Transgender Rights Project.

Loewy, along with Levi and GLAD Senior Staff Attorney Bennett Klein, represented Ms. O’Donnabhain along with lawyers from the Boston law firm of Sullivan & Worcester, who are serving as cooperating tax counsel in the case.

from www.glad.org

read the full text of the court’s decision here (PDF)

(Houston, Texas, December 18, 2006) — Today, Lambda Legal has filed papers in federal court in the Southern District of Texas on behalf of a transgender woman whose employment offer was rescinded because she is transgender.

“When the HR Director found out the company offered a job to a transgender person, the offer was rescinded,” said Cole Thaler, Transgender Rights Attorney at Lambda Legal. “Even though Izza was the best applicant for the job, the company decided that it didn’t want a transgender employee and claimed that she ‘misrepresented’ herself.”

Lambda Legal represents Izza Lopez, a 26-year-old transgender woman from Houston, Texas. In September 2005, Lopez applied for the position of scheduler with River Oaks Imaging and Diagnostic, a medical imaging company in Houston. Lopez sent in her resume, was invited in for an interview, completed a background check and drug test, and on October 4, 2005, she was asked to start work as soon as possible. Lopez gave notice to her then-current employer the following day and planned to start working at River Oaks the week of October 24. On October 10, however, Lopez received a phone call from River Oaks’ human resources director and one of its employment recruiters saying that River Oaks was rescinding its offer of employment because of her “misrepresentation” of herself as a woman. Lopez was unable to get her previous job back and was without employment for several months.

Lambda Legal filed Lopez v. River Oaks in the Southern District of Texas in the Fifth Circuit of the federal court system. The lawsuit charges that River Oaks violated Lopez’s rights under Title VII of the Civil Rights Act of 1964, the federal law prohibiting sex discrimination in employment.

“As an applicant, I was interviewed by a manager and a director who both felt I was qualified to do the job,” said Lopez. “I was shocked when I received the call from human resources taking away the job they’d offered me — it felt as if they’d said to me ‘you’re a monster; we don’t want you here.’”

Lopez v. River Oaks is Lambda Legal’s latest lawsuit in its Blow the Whistle campaign to end discrimination against lesbian, gay, bisexual and transgender (LGBT) people and those with HIV in the workplace. At Lambda Legal’s Blow the Whistle campaign website visitors can learn how to share their own stories of workplace discrimination or become an ally to others in the Blow the Whistle campaign. Employers, unions, coworkers, customers and clients can all serve as important allies for fairness in the workplace.

“Motivated by a commitment to equal treatment for all employees, allies can help ensure that people like Izza Lopez are treated fairly at work,” Thaler said.

Lambda Legal’s Transgender Rights Attorney Cole Thaler is lead counsel on the case and Ken Upton, Senior Staff Attorney in Lambda Legal’s South Central Regional Office in Dallas, is assisting him.

Lambda Legal is a national organization committed to achieving full recognition of the civil rights of lesbians, gay men, bisexuals, transgender people and those with HIV through impact litigation, education and public policy work.