Positive Liberty

A reader e-mailed me a very interesting NPR story today:

A Massachusetts transgender woman is suing the IRS for the right to claim her sex-change operation as a medical deduction on her income taxes.

Rhiannon O’Donnabhain says she spent more than $25,000 on sex-reassignment surgery in 2001, and claimed a $5,000 deduction she was entitled to. But the IRS denied the deduction, saying the surgery was essentially cosmetic and therefore not allowed under tax law. The case is now before a federal judge in Boston…

While O’Donnabhain believes her sex-change operation literally saved her life, the IRS argues that it falls into the category of “cosmetic surgery” under its tax code and is not allowed as a deduction. Agency officials declined to be interviewed for this story, but in court they argued that sex-reassignment surgery deals with the body’s appearance more than function, and that GID is not a “disease” or “illness” as defined by tax laws.

“The IRS is arguing that gender-reassignment surgery is really no different, conceptually, than a tummy tuck or a Botox injection,” said Theodore Seto, a professor at Loyola Law School, Los Angeles. “The argument is: ‘Look, she is changing her appearance so as to look better, to be happier with herself. It doesn’t treat any underlying problem.’”

But O’Donnabhain accused the IRS of discrimination. She said her surgery was meant to treat a legitimate and widely recognized medical condition.

“It’s really astonishing that the IRS is taking a position that they get to second-guess the determinations of a taxpayer’s medical care providers,” said O’Donnabhain’s attorney, Karen Loewy. “The medical community gets to decide what is medical care — not the IRS.”

But the IRS counters that the medical community is split. While some see sex-reassignment surgery as the closest thing medicine has to a cure for GID, others see the surgery as basically mutilating a person’s properly functioning anatomy.

“I think the problem doesn’t lie in their genitals, it lies in their mind, and we should be working on their mind,” says Paul McHugh, a professor of psychiatry at Johns Hopkins University. “We don’t do liposuction on people with anorexia nervosa to help them to be more thin. We encourage them to see that this is a misdirection of human interest.”

Gosh, where to begin on this?

It should be the decision of adult individuals and their doctors what goes into, comes out of, or gets cut off of a person’s body. Tax law should therefore not be used to incentivize or disincentivize any of these activities. Lower taxes would do very little to solve this problem, which stems from the deduction system itself and the sense of entitlement it creates.

Whether GID is a problem with the genitals or with the mind is unclear to me, and thus it seems a particularly bad fit for tax incentives in either direction. To illustrate why, let me offer the following analogy: Suppose that, as you get dressed one dark morning, you accidentally put on mismatched socks. Neither one of them is a bad sock; they both match equally well with your outfit — just not with each other. Which sock, then, is at fault? The answer is simple: Neither one. And which sock should you change? Again, it’s simple: You search through the drawer for a match to either one. You change the one that you can change.

Note, then, it does not necessarily follow that “mind” problems must be dealt with only in the mind. Were this the case, exercise as a treatment for depression would also be inappropriate, as would the wearing of clothes to counteract the unpleasant feeling of nakedness.

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