IRS Formally Agrees with Historic Court Ruling for Transgender Taxpayers
November 3, 2011 by Allison Herwitt, Vice President for Government Affairs
On Wednesday, the Internal Revenue Service announced its intent to formally agree, termed a "notice of acquiescence," with an historic 2010 decision of the U.S. Tax Court that overturned IRS policy disallowing tax deductions for medical care related to gender transition. The case, O'Donnabhain v. Commissioner, was brought by our colleagues at Gay & Lesbian Advocates & Defenders on behalf of a transgender woman who was denied the ability to utilize a federal income tax deduction for medical care costs because the IRS considered her transition-related care not to be medically necessary. In asserting its position, the IRS had cited 2005 guidance from the IRS's Chief Counsel.
The announcement notes that the IRS now agrees with the Tax Court's conclusion and that the IRS rescinds its contrary 2005 guidance. The announcement follows HRC’s formal request as part of HRC’s recommendations to the Obama administration, the Blueprint for Positive Change -- and actively lobbying the IRS Chief Counsel. The decision to formally agree with the O'Donnabhain decision, makes clear to transgender taxpayers that they are equally able to utilize the medical care deduction for medically necessary care, and helps to ensure that IRS field agents are aware of the law.
We applaud the IRS for taking a step that will help to address the financial burdens many transgender people face in simply trying to obtain appropriate care.
July 30, 2014