O'Donnabhain v. Commissioner

RHIANNON G. O’DONNABHAIN, PETITIONER v. COMMISSIONER

OF INTERNAL REVENUE, RESPONDENT

Docket No. 6402–06. Filed February 2, 2010.

In 1997, P, born a genetic male, was diagnosed with gender

identity disorder, a condition recognized in medical reference

texts, in which an individual experiences persistent psycho-

logical discomfort concerning his or her anatomical gender.

Medical professionals who treat gender identity disorder pre-

scribe for its treatment in genetic males, depending on the

severity of the condition, (i) administration of feminizing hor-

mones; (ii) living as a female in public; and (iii) after at least

a year of living as a female, surgical modification of the geni-

tals and, in some circumstances, breasts to resemble those of

a female (sex reassignment surgery). Pursuant to this treat-

ment regimen, P was prescribed feminizing hormones in 1997

and continued to take them through 2001. In 2000, after

plastic surgery to feminize facial features, P began presenting

full time in public as a female. In 2001 P underwent sex

reassignment surgery, including breast augmentation surgery.

P claimed a medical expense deduction under sec. 213, I.R.C.,

for the cost of the surgeries, transportation and other related

expenses, and feminizing hormones, for the taxable year 2001.

R disallowed the deduction. Held: P’s gender identity disorder

is a ‘‘disease’’ within the meaning of sec. 213(d)(1)(A) and

(9)(B), I.R.C. Held, further, P’s hormone therapy and sex

reassignment surgery were ‘‘for the * * * treatment * * * of ’’

and ‘‘[treated]’’ disease within the meaning of sec. 213(d)(1)(A)

and (9)(B), I.R.C., respectively, and consequently the proce-

dures are not ‘‘cosmetic surgery’’ that is excluded from the

definition of ‘‘medical care’’ by sec. 213(d)(9)(A), I.R.C., and

instead the amounts paid for the procedures are expenses for

‘‘medical care’’ that are deductible pursuant to sec. 213(a),

I.R.C. Held, further, P’s breast augmentation surgery was

‘‘directed at improving * * * [her] appearance’’ and she has

not shown that the surgery either ‘‘meaningfully [promoted]

the proper function of the body’’ or ‘‘[treated] * * * disease’’

within the meaning of sec. 213(d)(9)(B), I.R.C. Accordingly,

the breast augmentation surgery is ‘‘cosmetic surgery’’ within

the meaning of sec. 213(d)(9)(B), I.R.C., that is excluded from

the definition of deductible ‘‘medical care’’ by sec. 213(d)(9)(A),

I.R.C.

Karen L. Loewy, Bennett H. Klein, Jennifer L. Levi, Wil-

liam E. Halmkin, David J. Nagle, and Amy E. Sheridan, for

petitioner.

Mary P. Hamilton, John R. Mikalchus, Erika B. Cormier,

and Molly H. Donohue, for respondent.

34

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(34) O’DONNABHAIN v. COMMISSIONER 35

GALE, Judge: Respondent determined a deficiency of $5,679

in petitioner’s Federal income tax for 2001. After conces-

sions, 1 the issue for decision is whether petitioner may

deduct as a medical care expense under section 213 2

amounts paid in 2001 for hormone therapy, sex reassignment

surgery, and breast augmentation surgery that petitioner

contends were incurred in connection with a condition known

as gender identity disorder.

FINDINGS OF FACT

Many of the facts have been stipulated, and the stipulated

facts and attached exhibits are incorporated in our findings

by this reference. The parties have stipulated that this case

is appealable to the U.S. Court of Appeals for the First Cir-

cuit.

I. Petitioner’s Background

Rhiannon G. O’Donnabhain (petitioner) was born a genetic

male with unambiguous male genitalia. However, she 3 was

uncomfortable in the male gender role from childhood and

first wore women’s clothing secretly around age 10. Her

discomfort regarding her gender intensified in adolescence,

and she continued to dress in women’s clothing secretly.

As an adult, petitioner earned a degree in civil

engineering, served on active duty with the U.S. Coast

Guard, found employment at an engineering firm, married,

and fathered three children. However, her discomfort with

her gender persisted. She felt that she was a female trapped

in a male body, and she continued to secretly wear women’s

clothing.

Petitioner’s marriage ended after more than 20 years.

After separating from her spouse in 1992, petitioner’s

feelings that she wanted to be female intensified and grew

more persistent. 4

1 Petitioner concedes that she is not entitled to any deduction for an individual retirement ac-

count contribution, and respondent concedes that petitioner is entitled to deduct $1,369.59 as

medical expenses under sec. 213.

2 Unless otherwise indicated, all section references are to the Internal Revenue Code of 1986,

as amended and in effect in the year in issue, and all Rule references are to the Tax Court Rules

of Practice and Procedure.

3 Reflecting petitioner’s preference, we use the feminine pronoun to refer to her throughout

this Opinion.

4 Petitioner and her spouse were divorced in 1996.

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36 134 UNITED STATES TAX COURT REPORTS (34)

II. Petitioner’s Psychotherapy and Diagnosis

By mid-1996 petitioner’s discomfort with her male gender

role and desire to be female intensified to the point that she

sought out a psychotherapist to address them. After inves-

tigating referrals, petitioner contacted Diane Ellaborn (Ms.

Ellaborn), a licensed independent clinical social worker

(LICSW) and psychotherapist, and commenced psychotherapy

sessions in August 1996.

Although not a medical doctor, Ms. Ellaborn had a mas-

ter’s degree in social work and as an LICSW was authorized

under Massachusetts law to diagnose and treat psychiatric

illnesses. She had specialized training in the diagnosis and

treatment of gender-related disorders.

During petitioner’s psychotherapy Ms. Ellaborn learned of

petitioner’s cross-dressing history and of her longstanding

belief that she was really female despite her male body. Ms.

Ellaborn observed that petitioner was very sad and anxious,

had very low self-esteem, had limited social interactions, and

was obsessed with issues concerning the incongruence

between her perceived gender and her anatomical sex.

In early 1997, after approximately 20 weekly individual

therapy sessions, Ms. Ellaborn’s diagnosis was that peti-

tioner was a transsexual suffering from severe gender

identity disorder (GID), a condition listed in the Diagnostic

and Statistical Manual of Mental Disorders (4th ed. 2000

text revision) (DSM–IV–TR), published by the American Psy-

chiatric Association. The DSM–IV–TR states that a diagnosis

of GID is indicated where an individual exhibits (1) a strong

and persistent desire to be, or belief that he or she is, the

other sex; (2) persistent discomfort with his or her anatom-

ical sex, including a preoccupation with getting rid of pri-

mary or secondary sex characteristics; (3) an absence of any

physical intersex (hermaphroditic) condition; and (4) clini-

cally significant distress or impairment in social, occupa-

tional, or other important areas of functioning as a result of

the discomfort arising from the perceived incongruence

between anatomical sex and perceived gender identity. 5 See

5 In reaching her diagnosis Ms. Ellaborn considered and ruled out other causes—so-called co-

morbid conditions—of petitioner’s symptoms, including psychosis, an earlier diagnosis of atten-

tion deficit/hyperactivity disorder, depression, and transvestic fetishism.

Transvestic fetishism ‘‘occurs in heterosexual (or bisexual) men for whom the cross-dressing

behavior is for the purpose of sexual excitement. Aside from cross-dressing, most individuals

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(34) O’DONNABHAIN v. COMMISSIONER 37

DSM–IV–TR at 581. Under the classification system of the

DSM–IV–TR, a severity modifier—mild, moderate, or severe—

may be added to any diagnosis. 6 The term ‘‘transsexualism’’

is currently used in the DSM–IV–TR to describe GID symptoms

that are severe or profound. 7

Both the DSM–IV–TR and its predecessor the DSM–IV con-

tain the following ‘‘Cautionary Statement’’:

The purpose of DSM–IV is to provide clear descriptions of diagnostic cat-

egories in order to enable clinicians and investigators to diagnose, commu-

nicate about, study, and treat people with various mental disorders. It is

to be understood that inclusion here, for clinical and research purposes, of

a diagnostic category * * * does not imply that the condition meets legal

or other non-medical criteria for what constitutes mental disease, mental

disorder, or mental disability. * * *

III. Treatment of GID

The World Professional Association for Transgender Health

(WPATH), formerly known as the Harry Benjamin Inter-

national Gender Dysphoria Association, Inc., is an associa-

tion of medical, surgical, and mental health professionals

specializing in the understanding and treatment of GID. 8

WPATH publishes ‘‘Standards of Care’’ for the treatment of

GID (hereinafter Benjamin standards of care or Benjamin

standards). The Benjamin standards of care were originally

with Transvestic Fetishism do not have a history of childhood cross-gender behaviors.’’ DSM–

IV–TR at 580. Petitioner reported to Ms. Ellaborn that she cross-dressed in order to feel more

feminine rather than for purposes of sexual arousal.

6 A modifier of ‘‘severe’’ indicates that there are many more symptoms than those required

to make the diagnosis, or several symptoms that are particularly severe are present, or the

symptoms result in marked impairment in social and occupational functioning beyond the min-

imum threshold required for diagnosis. See DSM–IV–TR at 2.

7 The GID diagnosis was labeled ‘‘transsexualism’’ when it first appeared in the third edition

of the DSM published in 1980 (DSM–III). The fourth edition of the DSM, published in 1994

(DSM–IV), replaced the transsexualism diagnosis with GID and added the criterion for the diag-

nosis that the patient exhibit clinically significant distress or impairment in important areas

of functioning. The DSM–IV underwent a text revision in 2000, resulting in the DSM–IV–TR,

but there are no material differences in the DSM’s treatment of GID as between the DSM–IV

and DSM–IV–TR editions.

Notwithstanding the replacement of the transsexualism diagnosis with GID, the terms

‘‘transsexualism’’ and ‘‘transsexual’’ are still used generally in psychiatry to refer to severe or

profound GID— or a sufferer thereof.

8 Harry Benjamin, M.D. (1885–1986), was an endocrinologist who in conjunction with mental

health professionals in New York did pioneering work in the study of transsexualism. The par-

ties have stipulated that the term ‘‘gender dysphoria’’ was coined by Dr. Norman Fisk (Dr. Fisk)

in 1973 to describe patients presenting with dissatisfaction and unhappiness with their ana-

tomic and genetic sex and their assigned gender. The parties have further stipulated that, ac-

cording to a 1974 article by Dr. Fisk, transsexualism represents the most extreme form of gen-

der dysphoria.

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38 134 UNITED STATES TAX COURT REPORTS (34)

approved in 1979 and have undergone six revisions through

February 2001.

Summarized, the Benjamin standards of care prescribe a

‘‘triadic’’ treatment sequence for individuals diagnosed with

GID consisting of (1) hormonal sex reassignment; i.e., the

administration of cross-gender hormones to effect changes in

physical appearance to more closely resemble the opposite

sex; 9 (2) the ‘‘real-life’’ experience (wherein the individual

undertakes a trial period of living full time in society as a

member of the opposite sex); and (3) sex reassignment sur-

gery, consisting of genital sex reassignment and/or nongen-

ital sex reassignment, more fully described as follows:

Genital surgical sex reassignment refers to surgery of the genitalia and/

or breasts performed for the purpose of altering the morphology in order

to approximate the physical appearance of the genetically other esx [sic]

in persons diagnosed as gender dysphoric. * * * Non-genital surgical sex

reassignment refers to any and all other surgical procedures of non-genital,

or non-breast, sites (nose, throat, chin, cheeks, hips, etc.) conducted for the

purpose of effecting a more masculine appearance in a genetic female or

for the purpose of effecting a more feminine appearance in a genetic male

in the absence of identifiable pathology which would warrant such surgery

regardless of the patient’s genetic sex (facial injuries, hermaphroditism,

etc.).

Under the Benjamin standards, an individual must have

the recommendation of a licensed psychotherapist to obtain

hormonal or surgical sex reassignment. Hormonal sex

reassignment requires the recommendation of one

psychotherapist and surgical sex reassignment requires

the recommendations of two. 10 The recommending

psychotherapist should have diagnostic evidence for

transsexualism for a period of at least 2 years, independent

of the patient’s claims.

The Benjamin standards state that hormonal sex reassign-

ment should precede surgical sex reassignment because the

patient’s degree of satisfaction with hormone therapy ‘‘may

indicate or contraindicate later surgical sex reassignment.’’

9 Both parties’ experts agree that administration of cross-gender hormones in genetic males

with GID also has a psychological effect, producing a sense of well-being and a ‘‘calming effect’’.

10 To be qualified to recommend hormonal or surgical sex reassignment, a psychotherapist

must have (1) a master’s degree in clinical behavioral science, and at least one of the

recommenders for surgical sex reassignment must have a doctoral degree in the field; (2) com-

petence in psychotherapy as demonstrated by a State license to practice it; and (3) specialized

competence in sex therapy and gender identity disorders as demonstrated by supervised clinical

experience and continuing education.

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(34) O’DONNABHAIN v. COMMISSIONER 39

The Benjamin standards further state that ‘‘Genital sex

reassignment shall be preceded by a period of at least 12

months during which time the patient lives full-time in the

social role of the genetically other sex.’’ The standards pro-

vide that breast augmentation surgery may be performed as

part of sex reassignment surgery for a male-to-female patient

‘‘if the physician prescribing hormones and the surgeon have

documented that breast enlargement after undergoing hor-

mone treatment for 18 months is not sufficient for comfort in

the social gender role.’’

IV. Ms. Ellaborn’s Treatment Plan for Petitioner

After diagnosing severe GID in petitioner in early 1997, Ms.

Ellaborn administered a course of treatment that followed

the Benjamin standards of care. 11

A. Petitioner’s Hormone Treatments

In February 1997 Ms. Ellaborn referred petitioner to an

endocrinologist for feminizing hormone therapy, and peti-

tioner commenced taking hormones in September 1997. 12

She remained on feminizing hormones continuously through

the taxable year in issue (2001). 13

After beginning hormone therapy petitioner told Ms.

Ellaborn that she felt calmer and better emotionally and that

she felt positive about her physical changes. Ms. Ellaborn

viewed petitioner’s positive reactions to hormone therapy as

validation of the GID diagnosis.

Petitioner advised her former spouse and children of her

GID diagnosis in 1997 and 1998, respectively. 14

B. Petitioner’s ‘‘Real-Life’’ Experience

In consultation with Ms. Ellaborn, petitioner decided to

undertake the Benjamin standards’ ‘‘real-life’’ experience; i.e.,

to present in public as female on a full-time basis in March

11 Petitioner

attended monthly individual therapy sessions throughout most of 1997.

12 Petitioner

was hesitant about starting hormones and changing her appearance too quickly.

She was concerned about the impact on her children and coworkers. Petitioner’s 16-year-old son

was living with her at the time, and petitioner wished to postpone significant changes in her

appearance until after her son had graduated from high school and begun college.

13 Petitioner also commenced electrolysis treatments to remove body hair in September 1997

and continued them through 2005. The deductibility of the expenses related to electrolysis is

not at issue.

14 The children’s reactions were characterized by embarrassment, anger, denial, and with-

drawal.

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40 134 UNITED STATES TAX COURT REPORTS (34)

2000. Petitioner legally changed her name from Robert

Donovan to Rhiannon G. O’Donnabhain and arranged to

have the gender designation on her driver’s license changed,

on the basis of her GID diagnosis. 15 She underwent surgery

to feminize her facial features, 16 and with the cooperation of

her employer commenced presenting as a female at work

around April of that year. Petitioner informed Ms. Ellaborn

that her transition at work went smoothly and that the ‘‘real-

life’’ experience had been ‘‘incredibly easy’’. Ms. Ellaborn

viewed petitioner’s positive response to her ‘‘real-life’’ experi-

ence as further validation of the GID diagnosis.

C. Petitioner’s Sex Reassignment Surgery

Petitioner’s anxiety as a result of having male genitalia

persisted, 17 however, and Ms. Ellaborn concluded that her

prognosis without genital surgical sex reassignment (sex

reassignment surgery) was poor, in that petitioner’s anxiety

over the lack of congruence between her perceived gender

and her anatomical sex would continue in the absence of sur-

gery and would impair her ability to function normally in

society. In November 2000 Ms. Ellaborn wrote a referral

letter to Dr. Toby Meltzer (Dr. Meltzer), a board-certified

plastic and reconstructive surgeon, with over 10 years’

experience specializing in sex reassignment surgery, to

secure a place for petitioner on his waiting list.

After three additional therapy sessions with petitioner in

mid-2001, Ms. Ellaborn concluded that petitioner had satis-

fied or exceeded all of the Benjamin standards’ criteria for

sex reassignment surgery, including time spent satisfactorily

on feminizing hormones and in the ‘‘real-life’’ experience. In

July 2001 Ms. Ellaborn wrote a second letter to Dr. Meltzer

certifying petitioner’s GID diagnosis and satisfaction of the

15 Petitioner also carried with her a letter from Ms. Ellaborn explaining the GID diagnosis,

to be used in the event she was confronted by authorities for using a sex-segregated facility such

as a restroom or a changing room.

16 Ms. Ellaborn had observed that, notwithstanding 18 months of hormone therapy, petitioner

had distinctly male facial features which interfered with her ‘‘passing’’ as female. Ms. Ellaborn

referred petitioner to a plastic surgeon who in March 2000 performed procedures designed to

feminize petitioner’s facial features, including a rhinoplasty (nose reshaping), a facelift, and a

tracheal shave (reducing cartilage of the ‘‘Adam’s apple’’). Petitioner was dissatisfied with the

initial results, and in December 2000 the surgeon performed further surgery to revise the effects

of the earlier procedures. The surgeon also gave petitioner a Botox treatment at that time. The

deductibility of the foregoing procedures is not at issue.

17 In one instance, petitioner held a knife and had an urge to cut off her penis.

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(34) O’DONNABHAIN v. COMMISSIONER 41

Benjamin standards’ criteria for sex reassignment surgery,

and formally recommending petitioner for the sur-

gery. Another licensed psychotherapist with a doctoral degree

in clinical psychology, Dr. Alex Coleman (Dr. Coleman),

examined petitioner and provided a second recommendation

for her sex reassignment surgery, as required by the Ben-

jamin standards. Dr. Coleman’s letter to Dr. Meltzer

observed that petitioner ‘‘appears to have significant breast

development secondary to hormone therapy’’.

Petitioner, anticipating the formal recommendations for

her surgery, went for a consultation and examination by Dr.

Meltzer in June 2001 at his offices in Portland, Oregon.

Dr. Meltzer concluded that petitioner was a good candidate

for sex reassignment surgery. Dr. Meltzer’s notes of his phys-

ical examination of petitioner state: ‘‘Examination of her

breasts reveal [sic] approximately B cup breasts with a very

nice shape.’’

In mid-October 2001 petitioner returned to Portland, and

she underwent sex reassignment surgery on October 19,

2001. The procedures that Dr. Meltzer carried out included

surgical removal of the penis and testicles and creation of a

vaginal space using genital skin and tissue. The procedures

were designed to surgically reconfigure petitioner’s male

genitalia to create female genitalia both in appearance and

in function, by reconstructing the penile glans into a neo-clit-

oris, making sexual arousal and intercourse possible.

Dr. Meltzer also performed breast augmentation surgery

designed to make petitioner’s breasts, which had experienced

some development as a result of feminizing hormones, more

closely resemble the breasts of a genetic female.

In May 2002 Dr. Meltzer performed followup surgery on

petitioner to refine the appearance of her genitals and

remove scar tissue. In February 2005 Dr. Meltzer performed

further surgery on petitioner’s face, designed to feminize her

facial features. 18

V. Petitioner’s Claim for a Medical Expense Deduction

During 2001 petitioner incurred and paid the following

expenses (totaling $21,741) in connection with her hormone

therapy, sex reassignment surgery, and breast augmentation

18 The deductibility of these procedures undertaken in 2002 and 2005 is not at issue.

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42 134 UNITED STATES TAX COURT REPORTS (34)

surgery: (1) $19,195 to Dr. Meltzer for surgical procedures,

including $14,495 for vaginoplasty and other procedures,

$4,500 for breast augmentation, and $200 towards a portion

of petitioner’s postsurgical stay at Dr. Meltzer’s facility; (2)

$60 for medical equipment; (3) $1,544 in travel and lodging

costs away from home for presurgical consultation and sur-

gery; (4) $300 to Ms. Ellaborn for therapy; (5) $260 for the

consultation for a second referral letter for surgery; and (6)

$382 for hormone therapy. These payments were not com-

pensated for by insurance or otherwise.

On her Federal income tax return for 2001, petitioner

claimed an itemized deduction for the foregoing expenditures

as medical expenses, which respondent subsequently dis-

allowed in a notice of deficiency.

VI. Expert Testimony

A. Petitioner’s Expert: Dr. Brown

Petitioner’s expert, Dr. George R. Brown (Dr. Brown), is a

licensed physician, board certified in adult psychiatry by the

American Board of Psychiatry and Neurology. Dr. Brown has

been a member of the American Psychiatric Association since

1983 and was elected a Distinguished Fellow of that

organization in 2003. At the time of trial Dr. Brown was a

professor and associate chairman of the Department of

Psychiatry at East Tennessee State University and chief of

psychiatry at James H. Quillen Veterans Affairs Medical

Center in Johnson City, Tennessee.

Dr. Brown has been an active member of WPATH since

1987, including serving on its board of directors, and he

participated in the development of the Benjamin standards of

care. He has seen approximately 500 GID patients either in

a clinical setting or as an academic researcher. Dr. Brown

has published numerous papers in peer-reviewed medical

journals and written several book chapters on topics related

to GID, including those in the Merck Manuals, one of the

most widely used medical reference texts in the world.

Citing its recognition in the DSM–IV–TR, standard medical

reference texts, and World Health Organization publications,

Dr. Brown contends that there is general agreement in main-

stream psychiatry that GID is a legitimate mental disorder.

Dr. Brown indicates that there are no biological or laboratory

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(34) O’DONNABHAIN v. COMMISSIONER 43

tests that may be used to diagnose GID but notes the same

is true of virtually all of the mental disorders listed in the

DSM–IV–TR.

In Dr. Brown’s view, proper medical treatment of a person

diagnosed with GID includes extended psychotherapy and one

or more of the triadic therapies in the Benjamin standards.

Dr. Brown is not aware of any case in which psychotherapy

alone was effective in treating severe GID. For individuals

with severe GID, Dr. Brown believes completion of the entire

triadic sequence, i.e., through sex reassignment surgery, is

usually medically necessary to ‘‘cure or mitigate the distress

and maladaption caused by GID.’’

In Dr. Brown’s opinion, it is also important to the mental

health of a male with severe GID to be able to ‘‘pass’’ convinc-

ingly in public as female—that is, to be perceived as female

by members of the public. Failure to pass exacerbates the

anxieties associated with GID. Passing includes the use of

sex-segregated facilities such as restrooms and locker rooms,

where a failure to pass can result in public humiliation,

assault, or arrest. Genetic males with GID sometimes have

distinctly male facial features that make it difficult to pass,

absent surgery to feminize facial features.

According to Dr. Brown, autocastration, autopenectomy,

and suicide have been reported in patients who did not

receive appropriate treatment for their GID. Dr. Brown

rejects the idea that sex reassignment surgery is comparable

to cosmetic surgery or is undertaken to improve one’s appear-

ance, in view of the social stigma (including rejection by

family and employment discrimination) and the pain and

complications typically associated with such surgery. More-

over, Dr. Brown observes, normal genetic males generally do

not desire to have their penis and testicles removed. Such a

desire is regarded in the psychiatric literature as a likely

manifestation of psychosis (usually schizophrenia) or GID, fol-

lowed by a range of other less likely explanations. In Dr.

Brown’s opinion, people undergo sex reassignment surgery

because of the severity of their GID symptoms and the lack

of any other known effective treatment.

In Dr. Brown’s view, the scientific literature demonstrates

positive therapeutic outcomes from sex reassignment sur-

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44 134 UNITED STATES TAX COURT REPORTS (34)

gery. He cites widely used psychiatric reference texts that

reach the same conclusion. 19

On the basis of a review of petitioner’s medical records and

a telephone interview with petitioner, Dr. Brown opined that

petitioner was properly diagnosed with GID and petitioner’s

treatments, including sex reassignment surgery, were appro-

priate and medically necessary.

B. Respondent’s Expert: Dr. Schmidt

Respondent’s expert, Dr. Chester W. Schmidt, Jr. (Dr.

Schmidt), is a licensed physician, board certified in psychi-

atry by the American Board of Psychiatry and Neurology,

and a member of the American Psychiatric Association. At

the time of trial Dr. Schmidt was a professor of psychiatry

at the Johns Hopkins University School of Medicine, the

chief medical director, Johns Hopkins Health Care, and chair

of the medical board, Johns Hopkins Bayview Medical

Center.

Dr. Schmidt cofounded the Sexual Behavior Consultation

Unit of the Johns Hopkins Hospital, a clinical, teaching, and

research program devoted to the evaluation and treatment of

sexual disorders, in 1971. Since that time he has been active

in the clinical and teaching aspects of transsexualism, having

participated in the evaluation of approximately 12 patients

per year diagnosed with GID. However, he has not directly

treated or managed a patient with GID since the mid-1980s,

and his current clinical activity consists of evaluating new

cases of GID. Dr. Schmidt’s expert report states that he has

‘‘participated in the publication’’ of several peer-reviewed

medical journal articles about GID, but none has been identi-

fied for which he was a listed author, and he has never writ-

ten a chapter on the subject in a medical reference text.

In his expert report, Dr. Schmidt asserts that the validity

of the GID diagnosis remains the subject of debate within the

psychiatric profession and that he currently is undecided

about its validity. 20 However, 10 months before submitting

19 See Green, ‘‘Gender Identity Disorder in Adults’’, in New Oxford Textbook of Psychiatry 915

(Gelder, et al., eds., Oxford Univ. Press 2000); Green & Blanchard, ‘‘Gender Identity Disorders’’,

in Kaplan & Sadock’s Comprehensive Textbook of Psychiatry 1660 (Sadock & Sadock, eds., 7th

ed., Lippincott Williams & Wilkins 2000); Levine, ‘‘Sexual Disorders’’, in Psychiatry 1492

(Tasman, et al., eds., 2d ed., John Wiley & Sons 2005).

20 Dr. Schmidt’s report states that he is uncertain that GID is a mental disorder in the light

of the heterogeneity of GID patients (in terms of presentation, personality, and motivation) and

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his expert report, Dr. Schmidt provided a diagnosis of GID as

an expert in a U.S. District Court proceeding and continued

to make the diagnosis regularly through the time of trial, as

do other practitioners at the Johns Hopkins sexual disorders

clinic he cofounded. Further, Dr. Schmidt states that the GID

diagnosis is taught to psychiatrists in training at his and

other medical schools and is a condition with which they

must be familiar.

Dr. Schmidt agreed that GID requires treatment. He has

observed that ‘‘you can’t walk around day after day being

ambiguous about your gender identity. It will tear you apart

psychologically’’. Dr. Schmidt likewise agreed that untreated

GID in males can sometimes lead to autopenectomy,

autocastration, and suicide.

Dr. Schmidt believes that the Benjamin standards of care

are merely guidelines rather than true standards of care, in

that they do not meet the legal threshold of a ‘‘community’’

standard, the departure from which would constitute mal-

practice. Dr. Schmidt further believes that the Benjamin

standards enjoy only limited acceptance in American medi-

cine generally. He is unaware, however, of any significant

disagreement with the Benjamin standards within the psy-

chiatric profession, other than a minority that considers sex

reassignment surgery unethical. Dr. Schmidt agrees with the

Benjamin standards’ treatment protocols, with the exception

that he believes psychotherapy should be mandatory rather

than merely recommended for candidates for sex reassign-

ment. All GID patients at the sexual disorders clinic where

Dr. Schmidt practices are advised to become familiar with

the Benjamin standards of care.

Dr. Schmidt believes that cross-gender hormone therapy

and sex reassignment surgery have recognized medical and

psychiatric benefits for persons suffering from GID, including

reinforcement of an internal sense of consistency and balance

in their gender identity. Dr. Schmidt has also expressed the

view that once a genetic male with GID makes the decision

to transition to a female identity, everything that reinforces

the identity is helpful for psychological well-being. However,

in his opinion a therapist should remain neutral regarding

whether a patient should undergo hormone therapy or the

the lack of a scientifically supported etiology of the condition.

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46 134 UNITED STATES TAX COURT REPORTS (34)

surgery because, Dr. Schmidt believes, there is insufficient

scientific evidence of the procedures’ efficacy in treating GID.

A therapist should accordingly only take a position when

there are contraindications to the procedures, in his opinion.

Given his view that failure to adhere to the Benjamin

standards of care would not constitute malpractice and that

a therapist should remain neutral regarding the administra-

tion of hormone therapy or sex reassignment surgery, Dr.

Schmidt concludes that the procedures are elective and not

medically necessary. He acknowledges, however, that the

issue of the medical necessity of sex reassignment surgery is

‘‘contentious and variable within American medicine.’’

Finally, while noting that there is some evidence that GID

may have a neurological cause, Dr. Schmidt believes that

there is no conclusive scientific proof that GID is the result

of a genetic or congenital abnormality.

C. Respondent’s Expert: Dr. Dietz

Respondent’s expert, Dr. Park Dietz (Dr. Dietz), is a

licensed physician and board certified in psychiatry by the

American Board of Psychiatry and Neurology. Like Dr.

Brown, he is a Distinguished Fellow of the American Psy-

chiatric Association. At the time of trial Dr. Dietz was a clin-

ical professor of psychiatry and behavioral sciences at the

University of California at Los Angeles School of Medicine.

Dr. Dietz’ specialty is forensic psychiatry, and he has written

approximately 100 professional publications, mostly on

sexual, criminal, and antisocial behavior from the standpoint

of forensic psychiatry, in peer-reviewed journals, reference

text chapters, and other media. Dr. Dietz was recognized as

an expert in forensic psychiatry. He was retained by

respondent for the purpose of addressing the question of

whether GID or transsexualism is a disease or illness.

It is Dr. Dietz’ opinion that GID is a mental disorder,

susceptible of a correct or incorrect diagnosis, but not a dis-

ease or an illness because it has not been shown to arise

from a pathological process within the body—a necessary

condition for a disease in Dr. Dietz’ view. 21 While acknowl-

edging that commentators on the subject have advanced at

21 Dr. Dietz believes that ‘‘illness’’ is simply ‘‘the recognized presence of disease, usually as

a result of the host experiencing signs or symptoms, but sometimes as a result of an incidental

finding by a clinician or the observations of a third party.’’

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(34) O’DONNABHAIN v. COMMISSIONER 47

least three possible ‘‘sufficient conditions’’ for the presence of

disease (namely, discomfort, dysfunction, or pathology), Dr.

Dietz considers pathology the appropriate sufficient condi-

tion. Thus, in Dr. Dietz’ opinion, disease is defined as follows:

To be a disease, a condition must arise as a result of a pathological

process. It is not necessary that this process be fully known or understood,

but it is necessary that the pathology occur within the individual and

reflect abnormal structure or function of the body at the gross, microscopic,

molecular, biochemical, or neuro-chemical levels. * * *

Citing the cautionary statement in the DSM–IV–TR (to the

effect that inclusion of a condition in a diagnostic category of

the DSM does not imply that the condition meets legal criteria

for mental disease), Dr. Dietz asserts that the designation of

a condition as a mental disorder in the DSM–IV–TR does not

indicate that the condition is a disease. To be a disease, a

mental disorder must have a demonstrated organic or

biological origin in the individual, in his view.

Dr. Dietz testified that since qualification as a disease

under his definition depends upon a demonstration of the

condition’s organic origins, a condition may be a disease but

not known as such, pending scientific discoveries concerning

its etiology. For example, panic disorder and obsessive-

compulsive disorder are now understood to have an organic

basis, but their etiology was only discovered as a result of

laboratory advances within the last decade or so. Thus, both

conditions are diseases under Dr. Dietz’ definition, but would

not have been recognized as such 20 years ago. Dr. Dietz con-

firmed that bulimia 22 is psychologically unhealthy but not a

disease under his formulation because it has no dem-

onstrated organic etiology. Dr. Dietz was unable to say

whether anorexia 23 is a disease under his definition because

he was unfamiliar with the current state of scientific knowl-

edge of anorexia’s etiology. In Dr. Dietz’ view, post-traumatic

stress disorder is not a disease as he defines the term, but

an injury.

Dr. Dietz agrees that GID is sometimes associated with

autopenectomy, autocastration, and suicide.

22 As confirmed by Dr. Dietz, bulimia is a mental disorder characterized by binge eating fol-

lowed by inappropriate compensatory behaviors to avoid weight gain, such as induced vomiting.

23 As confirmed by Dr. Dietz, anorexia is a mental disorder in which an individual refuses to

maintain a minimally normal body weight, is phobic regarding weight gain, and exhibits a dis-

turbance in perception of the shape or size of his or her body.

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48 134 UNITED STATES TAX COURT REPORTS (34)

OPINION

I. Medical Expense Deductions Under Section 213

A. In General

Section 213(a) allows a deduction for expenses paid during

the taxable year for medical care that are not compensated

for by insurance or otherwise and to the extent that such

expenses exceed 7.5 percent of adjusted gross income. 24 In

addition, section 213(d)(1)(B) and (2) provides that certain

amounts paid for transportation and lodging, respectively,

may qualify as amounts paid for medical care under section

213(a) if a taxpayer’s travel away from home is primarily for

and essential to receiving medical care. 25

B. Definition of Medical Care

Congress first provided an income tax deduction for med-

ical expenses in 1942. See Revenue Act of 1942, ch. 619, sec.

127(a), 56 Stat. 825. The original provision was codified as

section 23(x) of the 1939 Internal Revenue Code and read as

follows:

SEC. 23. DEDUCTIONS FROM GROSS INCOME.

In computing net income there shall be allowed as deductions:

* * * * * * *

(x) MEDICAL, DENTAL, ETC., EXPENSES.—Except as limited under para-

graph (1) or (2), expenses paid during the taxable year * * * for medical

care of the taxpayer * * *. The term ‘‘medical care’’, as used in this sub-

section, shall include amounts paid for the diagnosis, cure, mitigation,

treatment, or prevention of disease, or for the purpose of affecting any

structure or function of the body * * *.

At the time, the Senate Committee on Finance commented

on the new deduction for medical expenses in relevant part

as follows:

24 Sec. 213(b) provides that amounts paid for a prescribed drug are treated as amounts paid

for medical care. The parties have stipulated that the feminizing hormones petitioner purchased

in 2001 were a prescribed drug within the meaning of sec. 213(b) and (d)(3), but respondent

does not stipulate that the hormones were for the treatment of an illness or disease within the

meaning of sec. 213.

25 The parties have stipulated that if any part of petitioner’s sex reassignment surgery is de-

termined by the Court to be deductible under sec. 213, then petitioner’s travel and lodging costs

incurred in connection with her consultation and surgery by Dr. Meltzer are also deductible.

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(34) O’DONNABHAIN v. COMMISSIONER 49

The term ‘‘medical care’’ is broadly defined to include amounts paid for

the diagnosis, cure, mitigation, treatment, or prevention of disease, or for

the purpose of affecting any structure or function of the body. It is not

intended, however, that a deduction should be allowed for any expense

that is not incurred primarily for the prevention or alleviation of a physical

or mental defect or illness.

S. Rept. 1631, 77th Cong., 2d sess. 95–96 (1942), 1942–2 C.B.

504, 576–577 (emphasis added); see Stringham v. Commis-

sioner, 12 T.C. 580, 583–584 (1949) (medical care is defined

in broad and comprehensive language, but it does not include

items which are primarily nondeductible personal living

expenses), affd. 183 F.2d 579 (6th Cir. 1950).

The core definition of ‘‘medical care’’ originally set forth in

section 23(x) of the 1939 Code has endured over time and is

currently found in section 213(d)(1)(A), which provides as fol-

lows:

SEC. 213 (d). DEFINITIONS.—For purposes of this section—

(1) The term ‘‘medical care’’ means amounts paid—

(A) for the diagnosis, cure, mitigation, treatment, or prevention of

disease, or for the purpose of affecting any structure or function of the

body * * *

Thus, since the inception of the medical expense deduction,

the definition of deductible ‘‘medical care’’ has had two

prongs. The first prong covers amounts paid for the ‘‘diag-

nosis, cure, mitigation, treatment, or prevention of disease’’

and the second prong covers amounts paid ‘‘for the purpose

of affecting any structure or function of the body’’.

The regulations interpreting the statutory definition of

medical care echo the description of medical care in the

Senate Finance Committee report accompanying the original

enactment. The regulations state in relevant part:

(e) Definitions—(1) General. (i) The term ‘‘medical care’’ includes the

diagnosis, cure, mitigation, treatment, or prevention of disease. Expenses

paid for ‘‘medical care’’ shall include those paid for the purpose of affecting

any structure or function of the body or for transportation primarily for

and essential to medical care. * * *

(ii) * * * Deductions for expenditures for medical care allowable under

section 213 will be confined strictly to expenses incurred primarily for the

prevention or alleviation of a physical or mental defect or illness. * * *

[Sec. 1.213–1(e)(1), Income Tax Regs.; emphasis added.]

Notably, the regulations, mirroring the language of the

Finance Committee report, treat ‘‘disease’’ as used in the

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50 134 UNITED STATES TAX COURT REPORTS (34)

statute as synonymous with ‘‘a physical or mental defect or

illness.’’ The language equating ‘‘mental defect’’ with ‘‘dis-

ease’’ was in the first version of the regulations promulgated

in 1943 and has stood unchanged since. See T.D. 5234, 1943

C.B. 119, 130. In addition, to qualify as ‘‘medical care’’ under

the regulations, an expense must be incurred ‘‘primarily’’ for

alleviation of a physical or mental defect, and the defect

must be specific. ‘‘[A]n expenditure which is merely beneficial

to the general health of an individual, such as an expendi-

ture for a vacation, is not an expenditure for medical care.’’

Sec. 1.213–1(e)(1)(ii), Income Tax Regs.

Given the reference to ‘‘mental defect’’ in the legislative

history and the regulations, it has also long been settled that

‘‘disease’’ as used in section 213 can extend to mental dis-

orders. See, e.g., Fischer v. Commissioner, 50 T.C. 164, 173

n.4 (1968) (‘‘That mental disorders can be ‘disease’ within the

meaning of [section 213(d)(1)(A)] is no longer open to ques-

tion.’’); Starrett v. Commissioner, 41 T.C. 877 (1964);

Hendrick v. Commissioner, 35 T.C. 1223 (1961).

In Jacobs v. Commissioner, 62 T.C. 813 (1974), this Court

reviewed the legislative history of section 213 and syn-

thesized the caselaw to arrive at a framework for analysis of

disputes concerning medical expense deductions. Noting that

the medical expense deduction essentially carves a limited

exception out of the general rule of section 262 that ‘‘per-

sonal, living, or family expenses’’ are not deductible, the

Court observed that a taxpayer seeking a deduction under

section 213 must show: (1) ‘‘the present existence or

imminent probability of a disease, defect or illness—mental

or physical’’ and (2) a payment ‘‘for goods or services directly

or proximately related to the diagnosis, cure, mitigation,

treatment, or prevention of the disease or illness.’’ Id. at 818.

Moreover, where the expenditures are arguably not ‘‘wholly

medical in nature’’ and may serve a personal as well as med-

ical purpose, they must also pass a ‘‘but for’’ test: the tax-

payer must ‘‘prove both that the expenditures were an essen-

tial element of the treatment and that they would not have

otherwise been incurred for nonmedical reasons.’’ Id. at

819. 26

26 Applying the foregoing principles, the Court in Jacobs v. Commissioner, 62 T.C. 813 (1974),

concluded that the expenses of the taxpayer’s divorce, even though the divorce was rec-

ommended by the taxpayer’s psychiatrist and was beneficial to the taxpayer’s mental health,

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(34) O’DONNABHAIN v. COMMISSIONER 51

C. Definition of Cosmetic Surgery

The second prong of the statutory definition of ‘‘medical

care’’, concerning amounts paid ‘‘for the purpose of affecting

any structure or function of the body’’, was eventually

adjudged too liberal by Congress. The Internal Revenue

Service, relying on the second prong, had determined in two

revenue rulings that deductions were allowed for amounts

expended for cosmetic procedures (such as facelifts, hair

transplants, and hair removal through electrolysis) because

the procedures were found to affect a structure or function of

the body within the meaning of section 213(d)(1)(A). See Rev.

Rul. 82–111, 1982–1 C.B. 48 (hair transplants and hair

removal); Rev. Rul. 76–332, 1976–2 C.B. 81 (facelifts); see

also Mattes v. Commissioner, 77 T.C. 650 (1981) (hair trans-

plants to treat premature baldness deductible under section

213).

In 1990 Congress responded to these rulings by amending

section 213 to include new subsection (d)(9) which, generally

speaking, excludes cosmetic surgery from the definition of

deductible medical care. See Omnibus Budget Reconciliation

Act of 1990, Pub. L. 101–508, sec. 11342(a), 104 Stat. 1388–

471. A review of the legislative history of section 213(d)(9)

shows that Congress deemed the amendment necessary to

clarify that deductions for medical care do not include

amounts paid for ‘‘an elective, purely cosmetic treatment’’. H.

Conf. Rept. 101–964, at 1031 (1990), 1991–2 C.B. 560, 562;

see also 136 Cong. Rec. 30485, 30570 (1990) (Senate Finance

Committee report language on Omnibus Budget Reconcili-

ation Act of 1990). 27

were not deductible medical expenses because the divorce would have been undertaken even ab-

sent the taxpayer’s depression.

27 The bill as initially passed in the House of Representatives did not include a provision ad-

dressing cosmetic surgery; this provision originated in the Senate. The report of the Senate Fi-

nance Committee, which was informally printed in the Congressional Record, contrasted ‘‘cos-

metic’’ procedures with ‘‘medically necessary procedures’’ as follows:

For purposes of the medical expense deduction, the IRS generally does not distinguish between

procedures which are medically necessary and those which are purely cosmetic.

* * * * * * *

* * * Expenses for purely cosmetic procedures that are not medically necessary are, in essence,

voluntary personal expenses, which like other personal expenditures (e.g., food and clothing)

generally should not be deductible in computing taxable income.

* * * * * * *

Continued

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52 134 UNITED STATES TAX COURT REPORTS (34)

Section 213(d)(9) defines ‘‘cosmetic surgery’’ as follows:

SEC. 213(d). DEFINITIONS.—For purposes of this section—

* * * * * * *

(9) COSMETIC SURGERY.—

(A) IN GENERAL.—The term ‘‘medical care’’ does not include cosmetic

surgery or other similar procedures, unless the surgery or procedure

is necessary to ameliorate a deformity arising from, or directly related

to, a congenital abnormality, a personal injury resulting from an

accident or trauma, or disfiguring disease.

(B) COSMETIC SURGERY DEFINED.—For purposes of this paragraph,

the term ‘‘cosmetic surgery’’ means any procedure which is directed at

improving the patient’s appearance and does not meaningfully pro-

mote the proper function of the body or prevent or treat illness or dis-

ease.

In sum, section 213(d)(9)(A) provides the general rule that

the term ‘‘medical care’’ does not include ‘‘cosmetic surgery’’

(as defined) unless the surgery is necessary to ameliorate

deformities of various origins. Section 213(d)(9)(B) then

defines ‘‘cosmetic surgery’’ as any procedure that is directed

at improving the patient’s appearance but excludes from the

definition any procedure that ‘‘meaningfully [promotes] the

proper function of the body’’ or ‘‘[prevents] or [treats] illness

or disease’’. There appear to be no cases of precedential value

interpreting the cosmetic surgery exclusion of section

213(d)(9). 28

II. The Parties’ Positions

Respondent contends that petitioner’s hormone therapy,

sex reassignment surgery, and breast augmentation surgery

are nondeductible ‘‘cosmetic surgery or other similar proce-

dures’’ 29 under section 213(d)(9) because they were directed

at improving petitioner’s appearance and did not treat an ill-

ness or disease, meaningfully promote the proper function of

the body, or ameliorate a deformity. Although respondent

* * * [U]nder the provision, procedures such as hair removal electrolysis, hair transplants,

lyposuction [sic], and facelift operations generally are not deductible. In contrast, expenses for

procedures that are medically necessary to promote the proper function of the body and only

incidentally affect the patient’s appearance or expenses for the treatment of a disfiguring condi-

tion arising from a congenital abnormality, personal injury or trauma, or disease (such as recon-

structive surgery following removal of a malignancy) continue to be deductible * * *.

28 Al-Murshidi v. Commissioner, T.C. Summary Opinion 2001–185, construed sec. 213(d)(9)

but was decided under sec. 7463 and may not be treated as precedent. See sec. 7463(b).

29 Respondent contends that petitioner’s hormone therapy was a ‘‘similar procedure’’ within

the meaning of sec. 213(d)(9)(A).

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(34) O’DONNABHAIN v. COMMISSIONER 53

concedes that GID is a mental disorder, respondent contends,

relying on the expert testimony of Dr. Dietz, that GID is not

a disease for purposes of section 213 because it does not arise

from an organic pathology within the human body that

reflects ‘‘abnormal structure or function of the body at the

gross, microscopic, molecular, biochemical, or neurochemical

levels.’’ Respondent further contends that the procedures at

issue did not treat disease because there is no scientific proof

of their efficacy in treating GID and that the procedures were

cosmetic surgery because they were not medically necessary.

Finally, respondent contends that petitioner did not have

GID, that it was incorrectly diagnosed, and that therefore the

procedures at issue did not treat a disease.

Petitioner maintains that she is entitled to deduct the cost

of the procedures at issue on the grounds that GID is a well-

recognized mental disorder in the psychiatric field that ‘‘falls

squarely within the meaning of ‘disease’ because it causes

serious, clinically significant distress and impairment of

functioning.’’ Since widely accepted standards of care pre-

scribe hormone treatment, sex reassignment surgery, and, in

appropriate circumstances, breast augmentation surgery for

genetic males suffering from GID, expenditures for the fore-

going constitute deductible ‘‘medical care’’ because a direct or

proximate relationship exists between the expenditures and

the ‘‘diagnosis, cure, mitigation, treatment, or prevention of

disease’’, petitioner argues. Morever, petitioner contends,

because the procedures at issue treated a ‘‘disease’’ as used

in section 213, they are not ‘‘cosmetic surgery’’ as defined in

that section. 30

III. Analysis

The availability of the medical expense deduction for the

costs of hormonal and surgical sex reassignment for a

transsexual individual presents an issue of first impression.

30 Petitioner also argues that the expenditures for the procedures at issue are deductible be-

cause they affected a structure or function of the body (within the meaning of sec. 213(d)(1)(A))

and were not ‘‘cosmetic surgery’’ under sec. 213(d)(9) because they were not ‘‘directed at improv-

ing the patient’s appearance’’ and because they ‘‘meaningfully [promoted] the proper function

of the body’’ (within the meaning of sec. 213(d)(9)(B)). Given our conclusion, discussed herein-

after, that the expenditures for petitioner’s hormone therapy and sex reassignment surgery are

deductible because they ‘‘[treated] * * * disease’’ within the meaning of sec. 213(d)(1)(A) and

(9)(B), we need not resolve the foregoing issues with respect to those expenditures. We consider

petitioner’s arguments with respect to the breast augmentation surgery more fully infra.

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54 134 UNITED STATES TAX COURT REPORTS (34)

A. Statutory Definitions

Determining whether sex reassignment procedures are

deductible ‘‘medical care’’ or nondeductible ‘‘cosmetic surgery’’

starts with the meaning of ‘‘treatment’’ and ‘‘disease’’ as used

in section 213. Both the statutory definition of ‘‘medical care’’

and the statute’s exclusion of ‘‘cosmetic surgery’’ from that

definition depend in part upon whether an expenditure or

procedure is for ‘‘treatment’’ of ‘‘disease’’. Under section

213(d)(1)(A), if an expenditure is ‘‘for the * * * treatment

* * * of disease’’, it is deductible ‘‘medical care’’; under sec-

tion 213(d)(9)(B), if a procedure ‘‘[treats] * * * disease’’, it is

not ‘‘cosmetic surgery’’ that is excluded from the definition of

‘‘medical care’’. 31

Because the only difference between the quoted phrases in

these two subparagraphs is the use of the noun form ‘‘treat-

ment’’ versus the verb form ‘‘treat’’, we see no meaningful

distinction between them. ‘‘Code provisions generally are to

be interpreted so congressional use of the same words

indicates an intent to have the same meaning apply’’. Elec.

Arts, Inc. v. Commissioner, 118 T.C. 226, 241 (2002); see also

Commissioner v. Keystone Consol. Indus., Inc., 508 U.S. 152,

159 (1993); United States v. Olympic Radio & Television,

Inc., 349 U.S. 232, 236 (1955); Zuanich v. Commissioner, 77

T.C. 428, 442–443 (1981). Consequently, the determination of

whether something is a ‘‘treatment’’ of a ‘‘disease’’ is the

same throughout section 213, whether for purposes of

showing that an expenditure is for ‘‘medical care’’ under sec-

tion 213(d)(1)(A) or that a procedure is not ‘‘cosmetic surgery’’

under section 213(d)(9)(B). A showing that a procedure con-

stitutes ‘‘treatment’’ of a ‘‘disease’’ both precludes ‘‘cosmetic

surgery’’ classification under section 213(d)(9) and qualifies

the procedure as ‘‘medical care’’ under section 213(d)(1)(A). 32

31 As noted, respondent contends that petitioner’s hormone therapy is a ‘‘similar procedure’’

within the meaning of the sec. 213(d)(9)(A) exclusion from ‘‘medical care’’ of ‘‘cosmetic surgery

or other similar procedures’’. Respondent does not contend, however, that the hormone therapy’s

status as a ‘‘similar procedure’’ within the meaning of sec. 213(d)(9)(A) ipso facto causes the

therapy to be excluded from ‘‘medical care’’. Instead, by arguing that the hormone therapy was

directed at improving petitioner’s appearance and did not treat an illness or disease, respondent

concedes that a ‘‘similar procedure’’ as used in sec. 213(d)(9)(A) is delimited by the definition

of ‘‘cosmetic surgery’’ in sec. 213(d)(9)(B)—that is, that a ‘‘similar procedure’’ is excluded from

the definition of ‘‘medical care’’ if it ‘‘is directed at improving the patient’s appearance and does

not meaningfully promote the proper function of the body or prevent or treat illness or disease’’.

32 The parties have stipulated that petitioner did not undertake hormone therapy or sex reas-

signment surgery to ameliorate a deformity arising from, or directly related to, a personal injury

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(34) O’DONNABHAIN v. COMMISSIONER 55

Congress’ reuse of the terms ‘‘treat’’ and ‘‘disease’’ in

defining ‘‘cosmetic surgery’’ in section 213(d)(9)(B) triggers a

second principle of statutory construction. Given that the

phrase ‘‘treatment * * * of disease’’ as used in the section

213(d)(1)(A) definition of ‘‘medical care’’ had been the subject

of considerable judicial and administrative construction when

Congress incorporated the phrase into the definition of ‘‘cos-

metic surgery’’ in 1990, it ‘‘had acquired a settled judicial and

administrative interpretation’’. Commissioner v. Keystone

Consol. Indus., Inc., supra at 159. In these circumstances ‘‘it

is proper to accept the already settled meaning of the

phrase’’. Id. Therefore, the pre-1990 caselaw and regulations

construing ‘‘treatment’’ and ‘‘disease’’ for purposes of the sec-

tion 213(d)(1)(A) definition of ‘‘medical care’’ are applicable to

the interpretation of those words as used in the section

213(d)(9)(B) definition of ‘‘cosmetic surgery’’.

B. Is GID a ‘‘Disease’’?

Petitioner argues that she is entitled to deduct her

expenditures for the procedures at issue because they were

treatments for GID, a condition that she contends is a ‘‘dis-

ease’’ for purposes of section 213. Respondent maintains that

petitioner’s expenditures did not treat ‘‘disease’’ because GID

is not a ‘‘disease’’ within the meaning of section 213. Central

to his argument is respondent’s contention that ‘‘disease’’ as

used in section 213 has the meaning postulated by respond-

ent’s expert, Dr. Dietz; namely, ‘‘a condition * * * [arising]

as a result of a pathological process * * * [occurring] within

the individual and [reflecting] abnormal structure or function

of the body at the gross, microscopic, molecular, biochemical,

or neuro-chemical levels.’’

On brief respondent cites the foregoing definition from Dr.

Dietz’ expert report and urges it upon the Court as the

meaning of ‘‘disease’’ as used in section 213; namely, that a

‘‘disease’’ for this purpose must have a demonstrated organic

or physiological origin in the individual. Consequently, GID is

arising from an accident or trauma, or a disfiguring disease. Petitioner has neither argued nor

adduced evidence that the foregoing procedures ameliorated a deformity arising from, or directly

related to, a congenital abnormality. See sec. 213(d)(9)(A). We consider petitioner’s arguments

concerning the breast augmentation surgery more fully infra.

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56 134 UNITED STATES TAX COURT REPORTS (34)

not a ‘‘disease’’ because it has ‘‘no known organic pathology’’,

respondent argues. 33

However, this use of expert testimony to establish the

meaning of a statutory term is generally improper. ‘‘[E]xpert

testimony proffered solely to establish the meaning of a law

is presumptively improper.’’ United States v. Prigmore, 243

F.3d 1, 18 n.3 (1st Cir. 2001). The meaning of a statutory

term is a pure question of law that is ‘‘exclusively the domain

of the judge.’’ Nieves-Villanueva v. Soto-Rivera, 133 F.3d 92,

99 (1st Cir. 1997); see also United States v. Mikutowicz, 365

F.3d 65, 73 (1st Cir. 2004); Bammerlin v. Navistar Intl.

Transp. Corp., 30 F.3d 898, 900 (7th Cir. 1994); Snap-Drape,

Inc. v. Commissioner, 105 T.C. 16, 19–20 (1995), affd. 98 F.3d

194, 198 (5th Cir. 1996). Closely analogous is S. Jersey Sand

Co. v. Commissioner, 30 T.C. 360, 364 (1958), affd. 267 F.2d

591 (3d Cir. 1959), where this Court refused to consider the

expert testimony of a geologist concerning the meaning of the

term ‘‘quartzite’’ as used in the Internal Revenue Code.

While the Court admitted Dr. Dietz’ expert report and

allowed him to testify over petitioner’s objection, the use to

which respondent now seeks to put his testimony is

improper, and we disregard it for that purpose. 34 The

meaning of ‘‘disease’’ as used in section 213 must be resolved

by the Court, using settled principles of statutory construc-

tion, including reference to the Commissioner’s interpretive

regulations, the legislative history, and caselaw precedent. 35

As a legal argument for the proper interpretation of ‘‘dis-

ease’’, respondent’s position is meritless. Respondent cites no

authority, other than Dr. Dietz’ expert testimony, in support

of his interpretation, and we have found none. To the con-

trary, respondent’s interpretation is flatly contradicted by

nearly a half century of caselaw. Numerous cases have

treated mental disorders as ‘‘diseases’’ for purposes of section

213 without regard to any demonstrated organic or physio-

logical origin or cause. See Fay v. Commissioner, 76 T.C. 408

33 The experts all agree and the Court accepts, for purposes of deciding this case, that no or-

ganic or biological cause of GID has been demonstrated.

34 In contrast, the testimony of the other two experts presents specialized medical knowledge

concerning the nature of GID. These facts bear upon whether GID should be considered to qual-

ify as a ‘‘disease’’, as the Court interprets that term.

35 Dr. Dietz’ testimony as a forensic psychiatrist is proper and useful regarding other matters,

such as the state of knowledge concerning organic origins of mental conditions, and the Court

relies on the testimony for certain other purposes, as discussed infra.

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(34) O’DONNABHAIN v. COMMISSIONER 57

(1981); Jacobs v. Commissioner, 62 T.C. at 818; Fischer v.

Commissioner, 50 T.C. 164 (1968); Starrett v. Commissioner,

41 T.C. 877 (1964); Hendrick v. Commissioner, 35 T.C. 1223

(1961); Sims v. Commissioner, T.C. Memo. 1979–499. These

cases 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 and warranting treatment. This Court’s discus-

sion in Fay v. Commissioner, supra at 414–415, is represent-

ative:

While the record is not too clear with respect to the precise nature of the

mental conditions of * * * [the taxpayer’s children], we are satisfied that

they both suffered from some sort of learning disability, accompanied by

emotional stress, which prevented, or at least interfered with, their ability

to cope in a normal academic environment. While this condition may or

may not have been psychiatric, it was certainly a mental handicap or

defect which we think may be considered a mental disease or defect for

purposes of section 213. It was the type of disorder that the petitioners,

their expert educational consultants, a psychiatrist, and the staff of the

DLD program[36] thought could be mitigated or alleviated, or possibly

cured, by the special attention and individual programing given to the chil-

dren at the DLD. While these mental disorders may not have been severe

enough to require psychiatric or psychological treatment, they were severe

enough to prevent the children from acquiring a normal education without

some help, and we think any treatment, whether rendered by medical

people or specially trained educators, directly related to the alleviation of

such mental disorders so that the recipient may obtain a normal, or more

normal, education, qualifies as medical care under the statute.

In Fischer v. Commissioner, supra at 173–174, there was a

similar absence of any discussion of organic or physiological

origins in this Court’s analysis of the ‘‘conventional meaning’’

of ‘‘disease’’.

The first question presented is whether petitioner’s son, Don, was suffering

from a ‘‘disease’’ as that term is used in the statute and the applicable

regulation. Given that term its conventional meaning, we think the evi-

dence is clear * * * that Don was suffering from a disease when he

entered Oxford Academy. As detailed in our findings, the report of the

Institute of the Pennsylvania Hospital states that as of that date Don had

‘‘not evolved the usual ‘defense’ or integrating mechanisms necessary for

dealing maturely, realistically and in an organized fashion, with the prob-

lems of his environment. * * * ’’ * * * a psychiatrist who treated Don for

36 The DLD program refers to the department of language development program, a special

program at the taxpayer’s children’s school for children with learning disabilities. Fay v. Com-

missioner, 76 T.C. 408, 410 (1981).

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58 134 UNITED STATES TAX COURT REPORTS (34)

almost a year, described him as a child with ‘‘significant neurotic blocks

against learning.’’ * * * [Fn. ref. omitted.]

See also Jacobs v. Commissioner, supra at 818 (taxpayer’s

‘‘severe depression’’ as evidenced by his psychiatrist’s testi-

mony is ‘‘disease’’ for purposes of section 213); Hendrick v.

Commissioner, supra at 1236 (‘‘emotional insecurity’’ of child

is a ‘‘disease’’ for purposes of section 213); Sims v. Commis-

sioner, supra (‘‘disease’’ for purposes of section 213 found

although ‘‘record does not contain a precise characterization

of * * * [the taxpayer’s son’s] condition in medical termi-

nology, there is ample evidence to support a finding that he

suffered from some sort of learning disability, accompanied

by emotional or psychiatric problems’’). We have also consid-

ered a condition’s listing in a diagnostic reference text as

grounds for treating the condition as a ‘‘disease’’, without

inquiry into the condition’s etiology. In Starrett v. Commis-

sioner, supra at 878 & n.1, 880–882, a reviewed Opinion, we

treated ‘‘anxiety reaction’’ as a ‘‘disease’’ for purposes of sec-

tion 213, pointing to the condition’s recognition in the Amer-

ican Medical Association’s Standard Nomenclature of Dis-

eases and Operations (5th ed. 1961).

The absence of any consideration of etiology in the caselaw

is consistent with the legislative history and the regulations.

Both treat ‘‘disease’’ as synonymous with ‘‘a physical or

mental defect’’, which suggests a more colloquial sense of the

term ‘‘disease’’ was intended than the narrower (and more

rigorous) interpretation for which respondent contends.

In addition, in the context of mental disorders, it is vir-

tually inconceivable that Congress could have intended to

confine the coverage of section 213 to conditions with dem-

onstrated organic origins when it enacted the provision in

1942, because physiological origins for mental disorders were

not widely recognized at the time. As Dr. Dietz confirmed in

his testimony, the physiological origins of various well-recog-

nized mental disorders—for example, panic disorder and

obsessive-compulsive disorder—were discovered only about a

decade ago. Moreover, Dr. Dietz confirmed that bulimia

would not constitute a ‘‘disease’’ under his definition, because

bulimia has no demonstrated organic origin, nor would post-

traumatic stress disorder. Dr. Dietz was unable to say

whether anorexia would meet the definition because he was

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(34) O’DONNABHAIN v. COMMISSIONER 59

uncertain regarding the current state of scientific knowledge

of its origins. Petitioner’s expert, Dr. Brown, testified without

challenge that most mental disorders listed in the DSM–IV–TR

do not have demonstrated organic causes. Thus, under the

definition of ‘‘disease’’ respondent advances, many well-recog-

nized mental disorders, perhaps most, would be excluded

from coverage under section 213—a result clearly at odds

with the intent of Congress (and the regulations) to provide

deductions for the expenses of alleviating ‘‘mental defects’’

generally.

In sum, we reject respondent’s interpretation of ‘‘disease’’

because it is incompatible with the stated intent of the regu-

lations and legislative history to cover ‘‘mental defects’’ gen-

erally and is contradicted by a consistent line of cases finding

‘‘disease’’ in the case of mental disorders without regard to

any demonstrated etiology.

Having rejected respondent’s contention that ‘‘disease’’ as

used in section 213 requires a demonstrated organic origin,

we are left with the question whether the term should be

interpreted to encompass GID. On this score, respondent,

while conceding that GID is a mental disorder, argues that

GID is ‘‘not a significant psychiatric disorder’’ but instead is

a ‘‘social construction’’—a ‘‘social phenomenon’’ that has been

‘‘medicalized’’. Petitioner argues that GID is a ‘‘disease’’ for

purposes of section 213 because it is well recognized in main-

stream psychiatric literature, including the DSM–IV–TR, as a

legitimate mental disorder that ‘‘causes serious, clinically

significant distress and impairment of functioning’’.

For the reasons already noted and those discussed below,

we conclude that GID is a ‘‘disease’’ within the meaning of

section 213. We start with the two caselaw factors influ-

encing a finding of ‘‘disease’’ in the context of mental condi-

tions: (1) A determination by a mental health professional

that the condition created a significant impairment to normal

functioning, warranting treatment, see Fay v. Commissioner,

76 T.C. 408 (1981); Jacobs v. Commissioner, 62 T.C. 813

(1974); Fischer v. Commissioner, 50 T.C. 164 (1968);

Hendrick v. Commissioner, 35 T.C. 1223 (1961), or (2) a

listing of the condition in a medical reference text, see

Starrett v. Commissioner, 41 T.C. 877 (1964). Both factors

involve deference by a court to the judgment of medical

professionals.

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60 134 UNITED STATES TAX COURT REPORTS (34)

As noted in our findings, GID is listed as a mental disorder

in the DSM–IV–TR, which all three experts agree is the pri-

mary diagnostic tool of American psychiatry. 37 See also

Danaipour v. McLarey, 286 F.3d 1, 17 (1st Cir. 2002)

(characterizing the DSM–IV as ‘‘the leading psychiatric diag-

nostic manual’’). GID or transsexualism is also listed in

numerous medical reference texts, with descriptions of their

characteristics that are similar to those in the DSM–IV–TR. 38

See Starrett v. Commissioner, supra.

Even if one accepts respondent’s expert Dr. Schmidt’s

assertion that the validity of the GID diagnosis is subject to

some debate in the psychiatric profession, the widespread

recognition of the condition in medical literature persuades

the Court that acceptance of the GID diagnosis is the pre-

vailing view. Dr. Schmidt’s own professed misgivings about

the diagnosis are not persuasive, given that he continues to

employ the diagnosis in practice, believes that psychiatrists

must be familiar with it, and recently gave a GID diagnosis

as an expert in another court proceeding. 39 On balance, the

37 We recognize that the DSM–IV–TR cautions that inclusion of a diagnostic category therein

‘‘does not imply that the condition meets legal or other non-medical criteria for what constitutes

mental disease, mental disorder, or mental disability.’’ For purposes of our decision in this case,

GID’s inclusion in the DSM–IV–TR (and its predecessors) evidences widespread recognition of

the condition in the psychiatric profession. Indisputably, the issue of whether GID is a ‘‘disease’’

for purposes of sec. 213 is for this Court to decide, and we do so on the basis of a range of fac-

tors, including GID’s inclusion in the DSM–IV–TR.

38 See, e.g., American Medical Association, Complete Medical Encyclopedia 595, 1234 (Random

House 2003); The Dictionary of Medical Terms 157 (4th ed. 2004); Dorland’s Illustrated Medical

Dictionary, http://www.mercksource.com/pp/us/cnslhlldorlands; ‘‘Gender Identity Disorder

and Transsexualism’’, Merck Manuals Online Medical Library, http://www.merck.com./mmpe/

print/sec15/ch203/ch203b.html; Miller-Keane Encyclopedia and Dictionary of Medicine, Nursing,

and Allied Health 728, 1808 (2003); National Institutes of Health, U.S. National Library of Med-

icine, MedlinePlus Medical Encyclopedia, http://nlm.nih.gov/medlineplus/ency/article/

001527.html; Sloane-Dorland Annotated Medical-Legal Dictionary 202–203, 233, 291, 310, 744

(1987).

Transsexualism is also listed and described in the International Classification of Diseases,

Ninth Revision, Clinical Modification (6th ed.) a publication of the American Medical Association

used in the United States for assigning codes to various diagnoses and procedures. Similarly,

various gender identity disorders, including transsexualism, are listed and described in the

International Classification of Diseases, Tenth Revision, a 1992 publication of the World Health

Organization that classifies diseases and health related problems.

Respondent stresses on brief that he stipulated that the foregoing publications were medical

reference texts but did not stipulate the truth of their contents. Except where otherwise indi-

cated, we consider medical reference texts solely for the fact that they recognize GID or

transsexualism and treatments for the condition.

39 Dr. Schmidt attributed his misgivings in part to the ‘‘lack of a scientifically supported eti-

ology of the condition’’, but as petitioner’s expert Dr. Brown pointed out, the same could be said

of most mental disorders listed in the DSM.

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(34) O’DONNABHAIN v. COMMISSIONER 61

evidence amply demonstrates that GID is a widely recognized

and accepted diagnosis in the field of psychiatry.

Second, GID is a serious, psychologically debilitating condi-

tion. Respondent’s characterization of the condition on brief

as a ‘‘social construction’’ and ‘‘not a significant psychiatric

disorder’’ is undermined by both of his own expert witnesses

and the medical literature in evidence. All three expert wit-

nesses agreed that, absent treatment, GID in genetic males is

sometimes associated with autocastration, autopenectomy,

and suicide. Respondent’s expert Dr. Schmidt asserts that

remaining ambiguous about gender identity ‘‘will tear you

apart psychologically’’. Petitioner’s expert Dr. Brown likewise

testified that GID produces significant distress and

maladaption. Psychiatric reference texts, established as reli-

able authority by Dr. Brown’s testimony, confirm the fore-

going. See Fed. R. Evid. 803(18). One such text states:

Cross-gender identity (gender identity contradicted by anatomical sex

characteristics) in adulthood virtually always causes distress to the indi-

vidual. * * * Cross-gender identity at any age, therefore, is appropriately

regarded as a disorder and a possible reason for clinical intervention.

* * * [Green & Blanchard, ‘‘Gender Identity Disorders’’, in Kaplan &

Sadock’s Comprehensive Textbook of Psychiatry 1646, 1659 (Sadock &

Sadock, eds., 2000).]

Another psychiatric reference text states that ‘‘Prior to rec-

ognition of transsexualism as a disorder deserving medical

and psychiatric attention many patients self-mutilated or

committed suicide out of despair.’’ Green, ‘‘Gender Identity

Disorder in Adults’’, in New Oxford Textbook of Psychiatry

914 (Gelder, et al., eds., 2000).

Ms. Ellaborn concluded that petitioner exhibited clinically

significant impairment from GID, to the extent that she des-

ignated petitioner’s condition as ‘‘severe’’ under the DSM–IV–

TR standards. Her diagnosis was supported by another doc-

toral-level mental health professional and by Dr. Brown. The

severity of petitioner’s impairment, coupled with the near

universal recognition of GID in diagnostic and other medical

reference texts, bring petitioner’s condition in line with the

circumstances where a mental condition has been deemed a

‘‘disease’’ in the caselaw under section 213.

Third, respondent’s position that GID is not a significant

psychiatric disorder is at odds with the position of every U.S.

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62 134 UNITED STATES TAX COURT REPORTS (34)

Court of Appeals that has ruled on the question of whether

GID poses a serious medical need for purposes of the Eighth

Amendment, which has been interpreted to require that pris-

oners receive adequate medical care. See Estelle v. Gamble,

429 U.S. 97, 103 (1976). In Estelle v. Gamble, supra at 104,

the U.S. Supreme Court held that ‘‘deliberate indifference to

serious medical needs of prisoners constitutes the ‘unneces-

sary and wanton infliction of pain’ * * * proscribed by the

Eighth Amendment.’’ The U.S. Courts of Appeals have

accordingly interpreted Estelle v. Gamble, supra, as estab-

lishing a two-prong test for an Eighth Amendment violation:

it must be shown that (1) the prisoner had a ‘‘serious medical

need’’ which (2) was met with ‘‘deliberate indifference’’ by

prison officials. See, e.g., Cuoco v. Moritsugu, 222 F.3d 99,

106 (2d Cir. 2000) (applying the Eighth Amendment test to

a pretrial detainee); White v. Farrier, 849 F.2d 322, 325–327

(8th Cir. 1988).

Seven of the U.S. Courts of Appeals that have considered

the question have concluded that severe GID or

transsexualism constitutes a ‘‘serious medical need’’ for pur-

poses of the Eighth Amendment. See De’lonta v. Angelone,

330 F.3d 630, 634 (4th Cir. 2003); Allard v. Gomez, 9 Fed.

Appx. 793, 794 (9th Cir. 2001); Cuoco v. Moritsugu, supra;

Brown v. Zavaras, 63 F.3d 967, 970 (10th Cir. 1995); Phillips

v. Mich. Dept. of Corr., 932 F.2d 969 (6th Cir. 1991), affg. 731

F. Supp. 792 (W.D. Mich. 1990); White v. Farrier, supra;

Meriwether v. Faulkner, 821 F.2d 408, 411–413 (7th Cir.

1987); see also Maggert v. Hanks, 131 F.3d 670, 671 (7th Cir.

1997) (describing gender dysphoria as a ‘‘profound psychiatric

disorder’’). 40 No U.S. Court of Appeals has held otherwise. 41

Deliberate indifference ‘‘requires that a prison official actu-

ally know of and disregard an objectively serious condition,

medical need, or risk of harm.’’ De’lonta v. Angelone, supra

at 634. Many of the foregoing opinions either found that

‘‘deliberate indifference’’ had not been shown or remanded to

40 The U.S. Supreme Court has also treated transsexualism as a serious medical condition,

relying on its listing in the DSM–III and the American Medical Association’s Encyclopedia of

Medicine (1989). See Farmer v. Brennan, 511 U.S. 825, 829 (1994).

41 Two Courts of Appeals have considered, but found it unnecessary to decide, whether GID

or transsexualism constitutes a serious medical need for purposes of the Eighth Amendment.

See Praylor v. Tex. Dept. of Criminal Justice, 430 F.3d 1208 (5th Cir. 2005), withdrawing 423

F.3d 524 (5th Cir. 2005) (holding that transsexualism constitutes a serious medical need for

Eighth Amendment purposes); Farmer v. Moritsugu, 163 F.3d 610, 614–615 (D.C. Cir. 1998).

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(34) O’DONNABHAIN v. COMMISSIONER 63

the District Court for further proceedings regarding that

point, but they reflect a clear consensus that GID constitutes

a medical condition of sufficient seriousness that it triggers

the Eighth Amendment requirement that prison officials not

ignore or disregard it. 42

In view of (1) GID’s widely recognized status in diagnostic

and psychiatric reference texts as a legitimate diagnosis, (2)

the seriousness of the condition as described in learned trea-

tises in evidence and as acknowledged by all three experts in

this case; (3) the severity of petitioner’s impairment as found

by the mental health professionals who examined her; (4) the

consensus in the U.S. Courts of Appeals that GID constitutes

a serious medical need for purposes of the Eighth Amend-

ment, we conclude and hold that GID is a ‘‘disease’’ for pur-

poses of section 213.

C. Did Petitioner Have GID?

Respondent also contends that petitioner was not correctly

diagnosed with GID, citing his expert Dr. Schmidt’s conten-

tions that certain comorbid conditions such as depression or

transvestic fetishism had not been adequately ruled out as

explanations of petitioner’s condition.

We find that petitioner’s GID diagnosis is substantially sup-

ported by the record. Ms. Ellaborn was licensed under State

law to make such a diagnosis. A second licensed professional

concurred, as did petitioner’s expert, a recognized authority

in the field. Ms. Ellaborn’s testimony concerning her diag-

nosis was persuasive. She considered and ruled out comorbid

conditions, including depression and transvestic fetishism,

and she believed her initial diagnosis was confirmed by peti-

tioner’s experience with the steps in the triadic therapy

sequence. 43

42 But see Maggert v. Hanks, 131 F.3d 670 (7th Cir. 1997), where the Court of Appeals for

the Seventh Circuit, after concluding that the plaintiff inmate had failed to establish that he

had gender dysphoria, observed in dicta that since treatment for gender dysphoria is ‘‘protracted

and expensive’’ and the Eighth Amendment does not require that a prisoner be given medical

care ‘‘that is as good as he would receive if he were a free person’’, the Amendment ‘‘does not

entitle a prison inmate to curative treatment for his gender dysphoria.’’ Id. at 671–672.

43 Petitioner’s response to the administration of cross-gender hormones is especially persuasive

regarding the diagnosis. Ms. Ellaborn observed that petitioner’s reaction to the effects of the

hormones was essentially positive; that is, the hormones engendered a sense of well-being and

a calming effect in petitioner—a well-documented phenomenon in genetic males suffering from

GID who receive feminizing hormones, confirmed by both respondent’s and petitioner’s experts.

By contrast, as Dr. Brown observed, when feminizing hormones are administered to non-GID-

Continued

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64 134 UNITED STATES TAX COURT REPORTS (34)

Absent evidence of a patent lack of qualifications, see, e.g.,

Flemming v. Commissioner, T.C. Memo. 1980–583 (rejecting

diagnosis of cancer and kidney disease by dentist), this Court

has generally deferred, in section 213 disputes, to the judg-

ment of the medical professionals who treated the patient,

see, e.g. Fay v. Commissioner, 76 T.C. at 414; Jacobs v.

Commissioner, 62 T.C. at 818; Fischer v. Commissioner, 50

T.C. at 173–174. All three witnesses who supported peti-

tioner’s GID diagnosis interviewed petitioner. Since Dr.

Schmidt did not, his analysis is entitled to considerably less

weight, and we conclude that there is no persuasive basis to

doubt the diagnosis.

D. Whether Cross-Gender Hormones, Sex Reassignment

Surgery, and Breast Augmentation Surgery ‘‘Treat’’

GID

1. Cross-Gender Hormones and Sex Reassignment Surgery

Our conclusions that GID is a ‘‘disease’’ for purposes of sec-

tion 213, and that petitioner suffered from it, leave the ques-

tion of whether petitioner’s hormone therapy, sex reassign-

ment surgery, and breast augmentation surgery ‘‘[treated]’’

GID within the meaning of section 213(d)(1)(A) and (9)(B).

In contrast to their dispute over the meaning of ‘‘disease’’,

the parties have not disputed the meaning of ‘‘treatment’’ or

‘‘treat’’ as used in section 213(d)(1)(A) and (9)(B), respec-

tively. We accordingly interpret the words in their ordi-

nary, everyday sense. See Crane v. Commissioner, 331 U.S.

1, 6 (1947); Old Colony R.R. Co. v. Commissioner, 284 U.S.

552, 560 (1932) (‘‘ ‘The legislature must be presumed to use

words in their known and ordinary signification’ ’’ (quoting

Levy’s Lessee v. M’Cartee, 6 Pet. 102, 110 (1832))); see also

Heard v. Commissioner, 269 F.2d 911, 912 (3d Cir. 1959)

(‘‘The words of * * * [section 213] are to be given their

normal meaning without striving to read exceptions into

them.’’), revg. in part 30 T.C. 1093 (1958).

‘‘Treat’’ is defined in standard dictionaries as: ‘‘to deal with

(a disease, patient, etc.) in order to relieve or cure’’, Webster’s

New Universal Unabridged Dictionary 2015 (2003); ‘‘to care

for or deal with medically or surgically’’, Merriam Webster’s

suffering males (for other medical reasons), and those males experience impotence, widening

hips, and breast development, their response is not a sense of well-being but anxiety.

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(34) O’DONNABHAIN v. COMMISSIONER 65

Collegiate Dictionary 1333 (11th ed. 2008); ‘‘5 a: to care for

(as a patient or part of the body) medically or surgically: deal

with by medical or surgical means: give a medical treatment

to * * * b: to seek cure or relief of * * * ’’, Webster’s Third

New International Dictionary 2435 (2002).

The regulations provide that medical care is confined to

expenses ‘‘incurred primarily for the prevention or alleviation

of a physical or mental defect or illness’’. Sec. 1.213–

1(e)(1)(ii), Income Tax Regs. (emphasis added). A treatment

should bear a ‘‘direct or proximate therapeutic relation to the

* * * condition’’ sufficient ‘‘to justify a reasonable belief the

* * * [treatment] would be efficacious’’. Havey v. Commis-

sioner, 12 T.C. 409, 412 (1949). In Starrett v. Commissioner,

41 T.C. at 881, this Court concluded that the taxpayer’s

psychoanalysis was a treatment of disease because the tax-

payer was ‘‘thereby relieved of the physical and emotional

suffering attendant upon’’ the condition known as anxiety

reaction.

Hormone therapy, sex reassignment surgery and, under

certain conditions, breast augmentation surgery are pre-

scribed therapeutic interventions, or treatments, for GID out-

lined in the Benjamin standards of care. The Benjamin

standards are widely accepted in the psychiatric profession,

as evidenced by the recognition of the standards’ triadic

therapy sequence as the appropriate treatment for GID and

transsexualism in numerous psychiatric and medical ref-

erence texts. 44 Indeed, every psychiatric reference text that

has been established as authoritative in this case endorses

sex reassignment surgery as a treatment for GID in appro-

priate circumstances. 45 No psychiatric reference text has

44 See ‘‘Gender Identity’’, Merck Manuals Second Home Edition, http://www.merck.com/mmhe/

print/sec07/ch104/ch104b.html; ‘‘Gender Identity Disorder and Transsexualism’’, Merck Manuals

Online Medical Library, supra; National Institutes of Health, U.S. National Library of Medicine,

Medline Plus Medical Encyclopedia, supra; Senagore & Frey, ‘‘Orchiectomy’’, Gale Encyclopedia

of Surgery (Thomson Gale 2003).

45 The following psychiatric reference texts have been established as learned treatises, see

Fed. R. Evid. 803(18), and endorse the essential elements of the triadic therapy sequence of the

Benjamin standards, including sex reassignment surgery. American Psychiatric Association,

Treatments of Psychiatric Disorders, ch. 70 (3d ed., American Psychiatric Press 2001):

The [Benjamin] ‘‘Standards of Care’’ for treating gender-dysphoric individuals, developed by an

international group of experts [citation omitted] and followed by most responsible professionals

in the field, provides a valuable guide for evaluation and treatment.

* * * * * * *

Continued

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66 134 UNITED STATES TAX COURT REPORTS (34)

been brought to the Court’s attention that fails to list, or

rejects, the triadic therapy sequence or sex reassignment sur-

gery as the accepted treatment regimen for GID. 46 Several

courts have accepted the Benjamin standards as representing

Once a patient has met readiness criteria for referral as outlined in the [Benjamin] Standards

of Care, she must decide on a surgical technique and surgeon. * * *

Becker, et al., ch. 19, ‘‘Sexual and Gender Identity Disorders’’, in The American Psychiatric

Press Textbook of Psychiatry (3d ed.):

Sex reassignment is a long process that must be carefully monitored. * * * If the patient is con-

sidered appropriate for sex reassignment, psychotherapy should be started to prepare the pa-

tient for the cross-gender role. The patient should then go out into the world and live in the

cross-gender role before surgical reassignment. * * * After 1–2 years, if these measures have

been successful and the patient still wishes reassignment, hormone treatment is begun. * * *

After 1–2 years of hormone therapy, the patient may be considered for surgical reassignment

if such a procedure is still desired.

Green, in New Oxford Textbook of Psychiatry, supra at 914–915:

* * * The [Benjamin standards of care] programme includes, in addition to ongoing psychiatric

or psychological monitoring, possibly endocrine therapy and, depending on the outcome of the

graduated trial period of cross-gender living, possibly sex reassignment surgical procedures. The

philosophy of treatment is to do reversible procedures before those that are irreversible.

* * * If patients can demonstrate to themselves and mental health experts that they have suc-

cessfully negotiated the ‘Real Life Test’ and are adjusting better socially in this new gender role,

they can be referred for surgery.

Sadock & Sadock, Kaplan & Sadock’s Comprehensive Textbook of Psychiatry 1659–1660 (7th

ed., Lippincott Williams & Wilkins 2000):

* * * When the patient’s gender dysphoria is severe and intractable, sex reassignment may be

the best solution. The first medical intervention in this process is hormone therapy. * * *

* * * The second major stage in the medical treatment of transsexualism is sex reassignment

surgery. All major gender identity clinics in North America and western Europe require their

patients to live full-time in the cross-gender role for some time—usually 1 to 2 years—prior to

surgery.

Tasman et al., Psychiatry 1491–1492 (2d ed., John Wiley & Sons 2003):

The treatment of * * * [gender identity disorders], although not as well-based on scientific evi-

dence as some psychiatric disorders, has been carefully scrutinized by multidisciplinary commit-

tees of specialists with the Harry Benjamin International Gender Dysphoria Association

[WPATH] for over 20 years. For more details in managing an individual patient, please consult

its ‘‘Standards of Care’’ [citation omitted]. * * *

* * * * * * *

Living in the aspired-to-gender role—working, relating, conducting the activities of daily living—

is a vital process that enables one of three decisions: to abandon the quest, to simply live in

this new role, or to proceed with breast or genital surgery [citation omitted]. * * *

Ideally, hormones should be administered by endocrinologists who have a working relationship

with a mental health team dealing with gender problems. * * *

* * * * * * *

Surgical intervention is the final external step.

46 Respondent offered into evidence a chapter from a psychiatric reference text that respond-

ent claimed did not reference the Benjamin standards of care; namely, Becker, et al., supra.

However, a review of the chapter cited (particularly pp. 743–744) reveals that the Benjamin

triadic sequence—cross-gender hormone therapy, living in the cross-gender role, and sex reas-

signment surgery—is discussed (without naming the Benjamin standards or WPATH specifi-

cally) and endorsed as the appropriate treatment protocol, as set out supra note 45.

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(34) O’DONNABHAIN v. COMMISSIONER 67

the consensus of the medical profession regarding the appro-

priate treatment for GID or transsexualism. See Gammett v.

Idaho State Bd. of Corr., No. CV05–257–S–MHW (D. Idaho,

July 27, 2007) (memorandum decision and order); Houston v.

Trella, No. 2:04–CV–01393 (D.N.J., Sept. 25, 2006) (opinion);

Kosilek v. Maloney, 221 F. Supp. 2d 156, 158 (D. Mass. 2002);

Farmer v. Hawk-Sawyer, 69 F. Supp. 2d 120, 121 n.3 (D.D.C.

1999).

Nonetheless, respondent’s expert Dr. Schmidt contends in

his report that ‘‘physician acceptance of the * * * [Benjamin

standards] is limited’’ and that the standards are guidelines

and are only ‘‘accepted as more than guidelines by profes-

sionals who advocate for hormonal and surgical treatment of

Gender Identity Disorder’’. However, Dr. Schmidt conceded

on cross-examination his prior sworn statement to the effect

that he agreed with the Benjamin standards (except that

psychotherapy should be mandatory rather than rec-

ommended) and was unaware of any significant disagreement

with the Benjamin standards in the psychiatric field, other

than those who believe that sex reassignment surgery is

unethical, 47 a position that Dr. Schmidt characterized as a

minority one. Dr. Schmidt also acknowledged that all GID

patients at the sexual disorders clinic at Johns Hopkins

where he practices are advised to become familiar with the

Benjamin standards of care, and he concedes that cross-

gender hormone therapy and sex reassignment surgery ‘‘have

recognized medical and psychiatric benefits’’ for persons suf-

fering from GID. 48 Dr. Schmidt also observed in his report

that most physicians—indeed, most psychiatrists—know very

little about GID or its treatment and shun GID patients, which

may explain why the acceptance of the Benjamin standards

is not broad based in American medicine. In any event, given

his own acceptance of the standards and their use in his

47 Dr. Schmidt cited an article by Dr. Paul McHugh as evidence of the view of sex reassign-

ment surgery as unethical and not medically necessary. On cross-examination, Dr. Schmidt ac-

knowledged that the McHugh article was not published in a peer-reviewed medical journal but

instead in a religious publication. See McHugh, ‘‘Surgical Sex’’, First Things, The Institute on

Religion and Public Life (November 2004), http://www.firstthings.com/index.php (online edition).

Respondent likewise cites the McHugh article on brief as medical opinion, without disclosing the

source of its publication.

48 Dr. Schmidt also acknowledged previously stating that a surgically created vagina in a bio-

logical male with GID ‘‘creates an internal sense of consistency that is very important in main-

taining a balance on a day-to-day basis and not having to bounce back and forth between, you

know, am I male or am I female.’’

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68 134 UNITED STATES TAX COURT REPORTS (34)

clinic, to the extent Dr. Schmidt is suggesting that the stand-

ards have limited acceptance among professionals knowledge-

able regarding GID, he is unpersuasive. The widespread rec-

ognition of the Benjamin standards in the medical literature

in evidence strongly supports the conclusion that the stand-

ards enjoy substantial acceptance.

Moreover, petitioner’s expert Dr. Brown contends that in

the case of severe GID, sex reassignment surgery is the only

known effective treatment; indeed, Dr. Brown was unaware

of any case where psychotherapy alone had been effective in

treating severe GID. The U.S. Court of Appeals for the Sev-

enth Circuit and the highest courts of two States have

reached similar conclusions. See Maggert v. Hanks, 131 F.3d

at 671; Sommers v. Iowa Civil Rights Commn., 337 N.W.2d

470, 473 (Iowa 1983); Doe v. Minn. Dept. of Pub. Welfare, 257

N.W.2d 816, 819 (Minn. 1977). 49

Respondent also argues that petitioner’s sex reassignment

surgery did not ‘‘treat’’ disease within the meaning of section

213(d)(9)(B) because there is insufficient scientific evidence of

the surgery’s efficacy in treating GID. Petitioner’s and

respondent’s experts disagree regarding the sufficiency of the

scientific proof of the surgery’s efficacy. Respondent’s expert

Dr. Schmidt contends that efficacy (beyond patient satisfac-

tion) has not been demonstrated, whereas petitioner’s expert

Dr. Brown believes there is ample proof of positive thera-

peutic outcomes.

Psychiatric reference texts support Dr. Brown’s position.

See Green, ‘‘Gender Identity Disorder in Adults’’, in New

Oxford Textbook of Psychiatry 915 (Gelder, et al., eds.,

Oxford Univ. Press 2000) (stating ‘‘Follow-up reports on oper-

ated transsexuals are generally quite favorable’’ and

describing a study where transsexual patients were randomly

49 Judge Posner wrote in Maggert v. Hanks, 131 F.3d at 671:

The cure for the male transsexual consists not of psychiatric treatment designed to make the

patient content

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