# UNITED STATES TAX COUR T

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## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

4

134 T .C . No . 4

UNITED STATES TAX COUR T

RHIANNON G . O'DONNABHAIN, Petitioner v .
COMMISSIONER OF INTERNAL REVENUE, Responden t

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 psychological discomfort
concerning his, or her anatomical gender . Medical
professionals who treat gender identity disorder
prescribe for its treatment in genetic males, depending
on the severity of the condition, (i) administration of
feminizing hormones ; (ii) living as a female in public ;
and (iii) after at least a year of living as a female,
surgical modification of the genitals and, in some
circumstances, breasts to resemble those of a female
(sex reassignment surgery) . Pursuant to this treatment
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 .

.FB 2 2010 .

- 2 Held : P's gender identity disorder is a "disease"
within the meaning of sec . 213(d)(1)(A) and (9)(B),
I .R .C .

1

Held , further , P's hormone therapy and sex
reassignment surgery were "for the * * * treatmen t
* * * of" and "[treated]" disease within the meaning of
sec . 213(d)(1)(A) and (9)(B), I .R .C ., respectively, and
consequently the procedures 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 ,
E . Halmkin ,

Bennett H . Klein ,

Jennifer L . Levi ,

William

David J . Nagle , and Amy E . Sheridan , for petitioner .

Mary P .•Hamilton ;

John R . Mikalchus ,

Erika B . Cormier , and

Molly H . Donohue , for respondent .

GALE,

Judge : Respondent determined a deficiency of $5,679

in petitioner's Federal income tax for 2001 . After concessions,'
the issue for decision is whether petitioner may deduct as a
medical care expense under section 2132 amounts paid in 2001 fo r

'Petitioner concedes that she is not entitled to any
deduction for an individual retirement account contribution, and
respondent concedes that petitioner is entitled to deduct
$1,369 .59 as medical . expenses . under sec . 213 .
2Unless otherwise indicated, all section references are to
(continued . . .)

- 3 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 FAC T

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 Circuit .
I .

Petitioner's Backgroun d
Rhiannon G . O'Donnabhain (petitioner) was born a genetic

male with unambiguous male genitalia . However, she3 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 .

2( . . .continued)
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 .
'Reflecting petitioner's preference, we use the feminine
pronoun to refer to her throughout this Opinion .

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
II .

Petitioner's Psychotherapy and Diagnosi s
By mid-1996 petitioner's discomfort with her male gender

i
role and desire to be female intensified to the point that she
sought out a psychotherapist to address them . After
.investigating 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 master'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

1

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 petitione r

'Petitioner and her spouse were divorced in 1996 .

S

-

5

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-IVTR), published by the American Psychiatric Association . The DSMIV-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 anatomical sex, including a
preoccupation with getting rid of primary or secondary sex
characteristics ; (3) an absence of any physical intersex
(hermaphroditic) condition ; and (4) clinically significant
distress or impairment in social, occupational, 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 DSM-IV-TR at 581 . Under th e

classification system of the DSM-IV-TR, a severity modifier-mild, moderate, or severe--may be added to any diagnosis .6 Th e

'In reaching her diagnosis Ms' . Ellaborn considered and ruled
out other causes--so-called comorbid conditions--of petitioner's
symptoms, including psychosis, an earlier diagnosis of attention
deficit/hyperactivity disorder, depression, and transvesti c
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
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 .
6A 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 th e
(continued . . .)

term "transsexualism" is currently used in the DSM-IV-TR to
describe GID symptoms that are severe or profound . '
Both the DSM-IV-TR and its predecessor the DSM-IV contain
the following "Cautionary Statement" :

The purpose of DSM-IV is to provide clear
descriptions of diagnostic categories in order to
enable clinicians and investigators to diagnose,
communicate 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 . * * *

R

6( . . .continued)
symptoms result in marked impairment in social and occupational
functioning beyond the minimum threshold required for diagnosis .
See DSM-IV-TR at 2 .
7The 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 diagnosis 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 .

S

- 7 III .

Treatment of GI D
The World Professional Association for Transgender Health

(WPATH), formerly known as the Harry Benjamin International
Gender Dysphoria Association, Inc ., is an association 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 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 undertake s
.a trial period of living full time in society as a member of the
opposite sex) ; and (3) sex reassignment surgery, consisting o f

8Harry 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 parties
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
anatomic and genetic sex and their assigned gender . The parties
have further stipulated that, according to a 1974 article by Dr .
Fisk, transsexualism'represents the most extreme form of gender
dysphoria .
9Both parties' experts agree that administration of crossgender hormones in genetic males with GID also has a
psychological effect, . producing a sense of well-being and a
"calming effect" .

8 genital sex reassignment and/or nongenital

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 reassignment
should precede surgical sex reassignment because the patient's
degree of satisfaction with hormone therapy "may indicate or
contraindicate later surgical sex reassignment." The Benjami n

"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) competence 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 .

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 provide 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 hormone treatment for 18 months is not sufficient for
comfort in the social gender role . "
IV .

Ms . Ellaborn's Treatment Plan for Petitione r

After diagnosing severe GID in petitioner in early 1997, Ms .
Ellaborn administered a course of treatment that followed the
Benjamin standards of care . 1 1
A.

Petitioner's Hormone Treatment s

In February 1997 Ms . Ellaborn referred petitioner to an
endocrinologist for feminizing hormone therapy, and petitioner
commenced taking hormones in September 1997 .12 She remained on
feminizing hormones continuously through the taxable year in
issue (2001) .1 3

"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
(continued . . .)

10 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 .

9

Petitioner advised her former spouse and children of her GID
diagnosis in 1997 and 1998, .respectively .1 4
B.

Petitioner's "Real-Life" Experienc e

In consultation with Ms . Ellaborn, petitioner decided to
undertake the Benjamin standards' "real-life" experience ; i .e .,
N

to present in public as female on a full-time basis in March
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 .'5 She underwent surgery to feminize her facial
features,16 and with the cooperation of her employer commence d

13( . .

.continued )

2005 . The deductibility of the expenses related to electrolysis
is not at issue .
14The-children's reactions were characterized by
embarrassment, anger, denial, and withdrawal .

i

"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 .
"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 t& a plastic surgeon who in March
2000 performed procedures designed to feminize petitioner's
facial features, including a rhinoplasty (nose reshaping), a
(continued . . .

- 11 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" experience as further validation of the GI D
diagnosis .
C.

Petitioner's Sex Reassignment Surger y

Petitioner's anxiety as a result of having male genitalia
persisted,'7 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 surgery 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 .

16( . . .continued)
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 .
'71n one instance, petitioner held a knife and had an urge
to cut off her penis .

I,i

12 After three additional therapy sessions with petitioner in
mid-2001, Ms . Ellaborn concluded that petitioner had satisfied 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 Benjamin
standards' criteria for sex reassignment surgery, and formally
recommending petitioner for the surgery . 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 Benjamin standards . Dr . Coleman's letter to Dr .
Meltzer observed that petitioner "appears-to have significant
1i

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 physical
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

- 13 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-clitoris, 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 .1 8
V.

Petitioner's Claim for a Medical Expense Dedudtion
During 2001 petitioner incurred and paid the following

expenses (totaling $21,741) in connection with her hormone
therapy, sex reassignment surgery, and breast augmentation
.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 surgery ; (4) $30 0

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

14 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 compensated 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 disallowed in a
notice of deficiency .
VI .

Expert Testimon y
A.

Petitioner's Expert : Dr . Brow n

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 .

- 15 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 mainstream
psychiatry that GID is a legitimate mental disorder . Dr . Brown
indicates that there are no biological or laboratory 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
maladaptidn 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"
convincingly 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 sexsegregated 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

16 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 appearance, in view of the
social stigma (including rejection by family and employment .
discrimination) and the pain and-complications typically
associated with such surgery . Moreover, 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, followed 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
11

positive therapeutic outcomes from sex reassignment surgery . He
cites widely used psychiatric reference texts that reach the same
conclus ioh .1 9

19See 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) .

17 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 appropriat e

and medically necessary .
B.

Respondent ' s Expert :

Respondent ' s expert ,
Schmidt ),

Dr . Schmid t

Dr . Chester W . Schmidt ,

Jr . (Dr .

is•a licensed physician, board certified in psychiatry

by the American Board of Psychiatry and Neurology ,

and a membe r

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 sexua l
.Since
that time he has been active-in the
.
disorders`, in 1971
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 identified for which he was a listed

- 18 author ,

and he has never written 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 ,
report ,

10 months before submitting his expert

Dr . Schmidt provided a diagnosis of GID as an expert in a

U .S . District Court proceeding and continued to make the
diagnosis regular ly 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-fa miliar .

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 .
psychologically" .

It will tear you apart

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 "co mm unity" standard,
the departure from which would constitute malpractice . . Dr .

20Dr . 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 the lack of.a scientifically supported etiology of the
condition .

- 19 Schmidt further believes that the Benjamin standards enjoy only
limited acceptance in American medicine generally . He is
unaware, however, of any significant disagreement with the
Benjamin standards within the psychiatric profession, other'tha n
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 reassignment . 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 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 .

ii

20 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 administration 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 . Diet z

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 Psychiatric
Association . At the time of trial Dr . Dietz was a clinical
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

- 21 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
disease 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 acknowledging that
commentators on the subject have advanced at least three possible
"sufficient conditions" for the presence of disease (namely,
discomfort, dysfunction, or pathology), Dr . Dietz considers
pathology the appropriate sufficient condition . 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 menta l

21Dr . 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 ."

- 22
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 confirmed that bulimia 22,iS
psychologically unhealthy but not a disease under his formulation
because it has no demonstrated organic etiology . Dr . Dietz was
unable to say whether anorexia23 is a disease under his
definition because he was unfamiliar with the current state of
scientific knowledge of anorexia's etiology . In Dr . Dietz' view,
post-traumatic stress disorder is not a disease as he defines the
term, but an injury .

22As confirmed by Dr . Dietz, bulimia is a mental disorder
characterized by binge eating following by inappropriate
compensatory behaviors to avoid weight gain, such as induced
vomiting .
23As 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
disturbance in perception of the shape or size of his or her
body .

23 Dr . Dietz agrees that GID is sometimes, associated with
autopenectomy, autocastration, .and suicide .
OPINION
I .

Medical Expense Deductions Under Section 213
A.

In Genera l

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 Car e

Congress first provided an income tax deduction for medical
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 :

24Sec . 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 .
25The parties have stipulated that if any part of
petitioner's sex reassignment surgery is determined 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 .

- 24 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 paragraph (1) or (2), expenses paid during the
taxable year * * * for medical care of the taxpayer * * * .
The term "medical care", as used in this subsection, 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 ne w
deduction for medical

expenses in . relevant part as follows :

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 . Commissioner , 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 a s
follows :

- 25 SEC . 213
section--

(d) . Definitions .-- For purposes of this

(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 "diagnosis, 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 statute as
synonymous with "a physical or mental defect or illness ." The

26 language equating "mental defect" with "disease" 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 expenditure,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 disorders .
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 question .") ; . Starrett
v . Commissioner , 41 T .C . 877 (19 .64) ;

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 synthesized
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 "personal, living, or family
expenses" are not deductible, the Court observed that a taxpayer
seeking a deduction under section 213 must show : (1) "the

- 27 present existence or imminent probability of a disease, defect o r
.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
medical purpose, they must also pass a "but for" test : the
taxpayer must "prove both that the expenditures were an essential
element of the treatment and that they would not have otherwise
been incurred for nonmedical reasons ."
C.

Id .

at 819 .2 6

Definition of Cosmetic Surger y

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 . 8 1

26Applying 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 recommended
by the taxpayer's psychiatrist and was beneficial to th e
taxpayer's mental health, were not deductible medical expenses
because the divorce would have been undertaken even absent the
taxpayer's depression .

- 28 (facelifts) ; see also Mattes v . Commissioner , 77 T .C . 650 (1981)
(hair transplants 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 Reconciliation Act of 1990) .2 7

27The bill as initially passed in the House of
Representatives did not include a provision addressing cosmetic
surgery ; this provision originated in the Senate . The report of
the Senate Finance Committee, which was informally printed in the
Congressional Record, contrasted "cosmetic" 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
(continued . .

29 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 personalinjury 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 promote the proper
function of the body or prevent or
treat illness or-disease .
.
In sum,section :213(d)(9)(A) provides the general rule that th e
term "medical care" does not include "cosmetic surgery" (a s

27 (

. . . continued )
deductible in computing .taxable income .

* * * [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 condition
arising from a congenital abnormality,
personal injury or trauma, or disease (such
as reconstructive surgery following removal
of a malignancy) continue to b e
deductible * * * .

- 30 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 sectio n
213(d) (9) .2 8
II .

The Parties' Position s

Respondent contends that petitioner's hormone therapy, sex
reassignment surgery, and breast augmentation surgery are
nondeductible "cosmetic surgery or other similar procedures"29
under section 213(d)(9) because they were directed at improving
petitioner's appearance and did not treat an illness or disease,
meaningfully promote the proper function of the body, or
ameliorate a deformity . Although respondent 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 ,

28 A1-Murshidi v . Commissioner , T .C . Summary Opinion 2001185, construed sec . 213(d)(9) but was decided under sec . 7463 and
may not be treated as precedent . See sec . 7463(b) .
29Respondent contends that petitioner's hormone therapy was
a "similar procedure" within the meaning of sec . 213(d)(9)(A) .

31 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 wellrecognized 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 prescribe
hormone treatment, sex reassignment surgery, and, in appropriate
circumstances, breast augmentation surgery for genetic males
suffering from GID, expenditures for the foregoing 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 .3 o

"Petitioner also argues that the expenditures for the
procedures at issue are deductible because 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 .
(continued . . . .)

- 32 III .

Analysi s

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 .
A.

Statutory Definition s

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 * * * treatmen t
of disease", it is deductible "medical care" ; under section
213(d)(9)(B), if a procedure "[treats] * * * disease", it is not
"cosmetic surgery" that is excluded from the definition of
"medical care" .3 1
30(

. .continued )
213(d)(9) because they were not "directed at improving 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 hereinafter, 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 .
31As 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 ,
(continued . . .)

- 33 Because the only difference between the quoted, phrases in
these two subparagraphs is the use of the noun form "treatment"
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 , 77T .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 section 213(d)(1)(A) or that a procedure is
not "cosmetic surgery" under section 213(d)(9)(B) . A showing
that a,procedure constitutes "treatment" of a "disease" both
precludes "cosmetic surgery" classification under sectio n

31 ( . . .continued )

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" .

34 213(d)(9) and qualifies the procedure as "medical care" under
section 213 (d) (1) (A) .3 2
Congress's 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 "cosmetic
surgery" in 1990, it "had acquired a settled judicial and
administrative interpretation" .
Indus ., Inc . ,

Commissioner v . Keystone Consol .

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 section
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" .

32The parties have stipulated that petitioner did not
undertake hormone therapy or sex reassignment surgery to
ameliorate a deformity arising from, or directly related to a
personal injury 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 .
f

- 35 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 "disease"
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 respondent'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 not a "disease"
because it has "no known organic pathology", respondent argues .3 3
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 . Pri mc ore , 243 F .3d 1 ,

33The experts all agree and the Court accepts, for purposes
of deciding this case, that no organic or biological cause of GID
has been demonstrated .

- 36 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) ;
F .3d 898, 900

Bammerlin v . Navistar Intl . Transp . Corp . , 30

(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 construction, including reference to the
Commissioner's interpretive regulations, the legislative history,
and caselaw precedent .3 s

34In contrast, the testimony of the other two experts
presents specialized medica l_ knowledge concerning the nature of
GID . These facts bear upon whether GID should be considered to
qualify as a "disease", as the Court interprets that term .
35Dr . 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 .

- 37 As a legal argument for the proper interpretation of
"disease", 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 contrary,
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 physiological origin or
cause . See

Fay v . Commissioner , 76 T .C . 408 (1981) ;

Commissioner , 62 T .C . at
164 (1968) ;

818 ;

Jacobs v .

Fischer v . Commissioner , 50 T .C .

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 discussion in

Fay v . Commissioner , su ra

at 414-415, is representative :

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

- 38 psychiatrist, and the staff of the DLD program [361
thought could be mitigated or alleviated, or possibly
cured, by the special attention and individual
programing given to the children 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
evidence 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
problems of his environment . * * *" * * * a
psychiatrist who treated Don for 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 testimony 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 . Commissioner ,

supra

("disease "

36The 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 .
v . Commissioner , 76 T .C . 408, 41Q (1981) .

Fay

- 39 for purposes of section 213 found although "record does not
contain a precise characterization of * * * [the taxpayer's
son's] condition in medical terminology, 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 considered 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 . Commissioner ,

supra at 878 & n .1, 880-882, a reviewed

opinion, we treated "anxiety reaction" as a "disease" for
purposes of section 213, pointing to the condition' .s recognition
in the American Medical Association's Standard Nomenclature of
Diseases 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
virtually inconceivable that Congress could have intended to
confine the coverage of section 213 to conditions with
demonstrated 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-recognized

40 mental disorders--for example, panic disorder and obsessivecompulsive 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 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-recognized 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
regulations and legislative history to cover "mental defects"
generally 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

41 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 mainstream 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 influencing a findin g
"disease" in the context of mental conditions : (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) ;

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

Fischer v .

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 .
As noted in our findings, GID is listed as a mental disorder
in the DSM-IV-TR, which all three experts agree is the primary
diagnostic tool of American psychiatry .37 See also Danaipour v .

37We recognize that the DSM-IV-TR cautions that inclusion of
a diagnostic category therein "does not imply that the conditio n
.(continued . . .)

- 42 McLarey,

286 F .3d 1, 17 (1st Cir . 2002) (characterizing the DSM-

IV as "the leading psychiatric diagnostic 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
Commissioner ,

Starrett v .

supra .

37 ( .

. .continued )
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 .recognitio n
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 factors, including GID's inclusion in the DSM-IV-TR .

38See, 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/cns_h l
dorlands ; "Gender Identity Disorder and Transsexualism", Merck
Manuals Online Medical Library, http ://www .merck .com ./mmpe/print/
secl5/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 Medicine,
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
indicated, we consider medical reference texts solely for the
fact that they recognize GID or transsexualism and treatments for
the condition .

43 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 prevailing
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 evidence amply
demonstrates that GID is a widely recognized and accepted
diagnosis in the field of psychiatry .
Second, GID is a serious, psychologically debilitating
condition . 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 witnesses 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 .

39Dr . Schmidt attributed his misgivings in part to the "lack
of a scientifically supported etiology 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 .

44 Psychiatric reference texts, established as reliable authority by
Dr . Brown's testimony, confirm the foregoing . 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
individual . * * * 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
recognition 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
designated petitioner's condition as "severe" under the DSM-IV-TR
standards . Her diagnosis was supported by another doctoral-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 .

45 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 prisoners
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 `unnecessary and .
wanton infliction of pain' * * * proscribed by the Eighth
Amendment ." The U .S . Courts of Appeals have accordingly
interpreted Estelle v . Gamble ,

supra,

as establishing 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 . Moritsuau , 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 purposes of the Eighth
Amendment . See De'lonta .v . Anaelone , 330 F .3d 630, 634 (4th .Cir .
2003) ;

Allard v . Gomez , 9 Fed . Appx . 793, 794 (9th Cir . 2001) ;

Cuoco v . Moritsuau ,
(10th Cir . 1995) ;

supra ; Brown v . Zavaras , 63 F .3d 967, 970

Phillips v . Mich . Dept . of Corr . , 932 F .2d 969

(6th Cir . 1991), affg . 731 F . Supp . 792 (W .D . Mich . 1990) ;
v . Farrier ,

supra ;

White

Meriwether v . Faulkner , 821 F .2d 408, 411-413

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

46 (7th Cir . 1997) (describing gender dysphoria as a "profound
psychiatric disorder") .4 0

No U .S . Court of Appeals has held

otherwise . 4 i
Deliberate indifference "requires that a prison official
actually 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 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 . 4 2

40The U .S . Supreme Court has also treated transsexualism as
a serious medical condition, relying on its listing in the DSMIII and the American Medical Association's Encyclopedia o f
Medicine (1989) . See Farmer v . Brennan , 511 U .S . 825, 829
(1994) .
41Two 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) .
42But 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 .

- 47 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 learne d
.treatises 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,Appeal that GID constitutes a
serious medical need for purposes of the Eighth Amendment, w e
conclude and hold-that GID is a""disease" for purposes of .sectio n
213 .
C.

Did Petitioner Have GID ?

Respondent also contends that petitioner was not correctly
diagnosed with GID, citing his expert Dr : Schmidt's contentions
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
supported 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 diagnosis was
persuasive . She considered and ruled out comorbid conditions,
including depression and transvestic fetishism, and she believed

- 48 her initial diagnosis was confirmed by petitioner's experience
with the steps .in the triadic therapy sequence .4 3
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 judgment
of the medical professionals who treated the patient, see, ; e .g .
Fay v . . Commissioner , 76 T .C . at 414 ;
T .C .,at 818 ;

Jacobs v . Commissioner , 62

Fischer v . Commissioner , 50 T .C . at 173-174 . All

three witnesses who supported petitioner'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" GI D
1 .

Cross-Gender Hormones and Sex Reassignment
Surger y

Our conclusions that GID is a "disease" for purpose's of
section 213, and that petitioner suffered from it, leave the
question of whether petitioner's hormone therapy, se x

43Petitioner's response to the administration of crossgender 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 .iand 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 nonGID-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 .

- 49
reassignment 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), respectively .
We accordingly interpret the words in their ordinary, 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
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 t o
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),

- 50 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 . Commissioner , 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 taxpayer 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 prescribed
therapeutic interventions, or treatments, for GID outlined 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 reference 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 appropriatecircumstances .45 No psychiatri c

44See "Gender Identity", Merck Manuals Second Home Edition,
http ://www .merck .com/mmhe/print/sec07/chl04/chl04b .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) . .

45The following psychiatric reference texts have-been
established as learned treatises, see Fed . R . Evid . 803(18), an d
(continued . . .)

- 51 -

45( . . .continued)
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 genderdysphoric 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 . * * *

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 considered
appropriate for sex reassignment, psychotherapy should
be started to prepare the-patient 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 se x
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 successfully
negotiated the `Real Life Test' and are adjustin g
(continued . . .)

- 52 reference text has been brought to the Court's attention tha t
45( . . .continued)
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 genderdysphoria is severe and
intractable, sex reassignment may be the best solution .
The first medical intervention in this process i s
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 evidence as
some psychiatric disorders, has been carefully
scrutinized by multidisciplinary committees 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 .

53 fails to list, or rejects, the triadic therapy sequence or sex
reassignment surgery as the accepted treatment regimen for GID

.46

Several courts have accepted the Benjamin standards as
representing the consensus of the medical profession regarding
the appropriate 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 professionals 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 recommended) and was unaware of any significant
disagreement with the Benjamin standards in the psychiatric
field , other than those who believe that sex reassignment surger y

"Respondent offered into evidence a chapter from a
psychiatric reference text that respondent 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
reassignment surgery--is discussed (without naming the Benjamin
standards or WPATH specifically) and endorsed as the appropriate
treatment protocol, as set out supra note 42 .

- 54 is unethical,97 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 an d
psychiatric benefits" for persons suffering from GID .4 8
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 clinic, to the extent,Dr . Schmidt is suggesting that
the standards have limited acceptance among professionals
knowledgeable regarding GID, he is unpersuasive . The widespread
recognition of the Benjamin standards in the medical literatur e

47 Dr . Schmidt cited an article by Dr . Paul McHugh a s
evidence of the view of sex reassignment surgery as unethical and
not medically necessary . On cross-examination, Dr . Schmidt
acknowledged that the McHugh article . was not published in a peerreviewed 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 .

48Dr . Schmidt also acknowledged previously stating that a
surgically created vagina in a biological male with GID "creates
an internal sense of consistency that is very important in
maintaining 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 ."

- 55 in evidence strongly supports the conclusion that the standards
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 Seventh Circuit and the
highest courts of two States have reached similar conclusions .
See Maggert v . Hanks , 131 F .3d at 671 ;

Sommers v . Iowa Civi l

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) .4 9
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 o f

49Judge 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 with his biological sexual identity--that
doesn't work--but' of estrogen therapy designed to
create the secondary sexual characteristics of a woma n
followed by the surgical removal of the genitals and
the construction of a vagina-substitute out of penile
tissue . [Citations omitted . ]
See also Tasman et al ., Psychiatry 1491 (2d ed ., John Wiley &
Sons 2003) :
No one knows how to cure [through psychotherapy] an
adult's gender problem . People who have long lived
with profound cross-gender identifications do not get
insight--either behaviorally modified or medicated--and
find that they subsequently have a conventional gender
identity . Psychotherapy is useful, nonetheless
[citation omitted] . * * *

- 56 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 satisfaction)
has not been demonstrated, whereas petitioner's expert Dr . Brown
believes there is ample proof of positive therapeutic 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 operated transsexuals
are generally quite favorable" and describing a study where
transsexual patients were randomly divided into two groups, one
receiving surgery promptly and, the other having surgery postponed
for 2 years ; "The group that received the earlier surgery showed
significant improvement in a range of psychometric measures and
maintained employment . The unoperated group showed no
improvement in psychological testing and deteriorated in
employment") ; Green & Blanchard, "Gender Identity Disorders," in
Kaplan & Sadock's Comprehensive Textbook of Psychiatry 1660
(Sadock & Sadock, eds ., 7th ed ., Lippincott Williams & Wilkins
2000) ("Outcome studies as a whole suggest that surgical sex
reassignment produces additional improvements in psychosocial
adjustment") ; Levine, "Sexual Disorders", in Psychiatry 1492
(Tasman, et al ., eds ., 2d ed ., John Wiley & Sons 2005) ("Surgery
can be expected to add further improvements in the lives of
patients [citation omitted]--more social activities with friends

- 57 and family, more activity in sports, more partner sexua l
activity, and improved vocational status") .
However, even assuming some debate remains in the medical
profession regarding acceptance of the Benjamin standards or the .
scientific proof of the therapeutic efficacy of sex reassignment
surgery, a complete consensus on the advisability or efficacy of
a procedure is not necessary for a deduction under section 213 .
See, e .g .,

Dickie v . Commissioner , T .C . Memo . 1999-138

(naturopathic cancer treatments deductible) ;

Crain v .

Commissioner , T .C . Memo . 1986-138 (holistic cancer treatments
deductible but for failure of substantiation) ;

Tso v .

Commissioner , T .C . Memo . 1980-399 (Navajo "sings" (healing
ceremonies) deductible) ; Rev . Rul . 72-593, 1972-2 C .B . 180
(acupuncture deductible) ; Rev . Rul . 55-261, 1955-1 C .B . 307
(services of Christian Science practitioners deductible) . . It is
sufficient if the circumstances "justify a reasonable belief the
* * * [treatment] would be efficacious" .

Havey v . Commissioner ,

12 T .C . at 412 . That standard has been fully satisfied here .
The evidence is clear that a substantial segment of th e
psychiatric profession has been persuaded of the advisability and
efficacy of hormone therapy and sex reassignment surgery as
treatment for GID, as have many courts .

Finally, the Court does not doubt that, as respondent's
expert Dr . Schmidt points out in his report, some medical
professionals shun transsexual patients and consider cross-gender
hormone therapy and sex reassignment surgery unethical because

58 they disrupt what is considered to be a "normally functioning
hormonal status or destroy healthy, normal tissue ." However, the
Internal Revenue Service has not heretofore sought to deny the
deduction for a medical procedure because it was considere d
unethical by some .

See, e .g ., Rev . Rul . 73-201, 1973-1 C .B . 140

(cost of abortion legal under State law is deductible medica l
care under section 213) ; Rev . Rul . 55-261,

supra

(services of

Christian Science practitioners deductible) . Absent a showing of
illegality, any such ground for denying a medical expense
deduction finds no support in section 213 .
In sum, the evidence establishes that cross-gender hormone
therapy and sex reassignment surgery are well-recognized and
accepted treatments for severe GID . The evidence demonstrates
that . hormone therapy and sex reassignment surgery to alter
appearance (and, to some degree, function50) are undertaken by
GID sufferers in an effort to alleviate the distress and
suffering occasioned by GID, and that the procedures . have
positive results in this regard in the opinion of many in the
psychiatric profession, including petitioner's

and respondent's

experts . Thus, a "reasonable belief" in the procedures' efficacy
is justified . See Havey v . Commissioner ,

supra at 412 .

Alleviation of suffering falls within the regulatory and casela w

50The undisputed evidence is that administration of
feminizing hormones to genetic male GID sufferers produces a
psychological calming effect in addition to physical changes .
Sex reassignment surgery in genetic males uses penile tissue in
the newly created vagina in a manner designed to make the patient
capable of arousal and intercourse .

- 59 definitions of treatment, see Starrett v . Commissioner ,

supra ;

sec . 1 .213-1(e)(1), Income Tax Regs ., and to "relieve" is to
"treat" according to standard dictionary definitions . We
.therefore conclude and hold that petitioner's hormone therapy and
sex reassignment surgery "[treated] * * * disease" within the
meaning of section 21 3 (d)(9)(B) and accordingly are not "cosmetic
surgery" as defined-in that section .
While our holding that cross-gender hormone therapy and sex
reassignment surgery are not cosmetic surgery is based upon the
specific definition of that term in section 213(d)(9)(B), our
conclusion that these procedures treat disease also finds support
in the opinions of other courts that have concluded for various
nontax purposes that sex reassignment surgery and/or hormone
therapy are not cosmetic procedures . See, e .g .,

Meriwether v .

Faulkner , 821 F .2d at`411-413 (rejecting, in an Eighth Amendment
case, the District Court's conclusion that a transsexual inmate's
requested hormone therapy was "`elective medication' necessary
only to maintain `a physical appearance and life style"' and
noting that numerous courts have "expressly rejected the notion
that transsexual surgery is properly characterized as cosmetic
surgery, concluding instead that such surgery is medically
necessary for the treatment of transsexualism") ;

Pinneke v .

Preisser , 623 F .2d 546, 548 (8th Cir . 198,0) (State Medicaid plan
may not deny reimbursement for sex reassignment surgery on
grounds that it is "cosmetic surgery") ;

Rush v . Parham , 440 F .

Supp . 383, 390-391 (N .D . Ga . 1977) (to same effect), revd . on

60 other grounds 625 F .2d 1150 (5th Cir . 1980) ;

J .D . v . Lackner , 145

Cal . Rptr . 570, 572 (Ct . App . 1978) (sex reassignment surgery is
not "cosmetic surgery" as defined in State Medicaid statute ; "We
do not believe, by the wildest stretch of the imagination, that
such surgery can reasonably and logically be . characterized as
cosmetic .") ;

G .B . v . Lackner , 145 Cal . Rptr . 555, 559 (Ct . App .

1978) (to same effect) ;

Davidson v . Aetna Life & Cas . Ins . Co . ,

420 N .Y .S .2d 450, 453 (N .Y . Sup . .Ct . 1979) (sex reassignment
surgery is not "cosmetic surgery" within meaning of, medical
insurance policy exclusion ; sex reassignment surgery "is
performed to correct a psychological defect, and not to improve
muscle tone or physical appearance . * * * [It] cannot be
considered to . be of a strictly cosmetic nature .") . But see Smith
v . Rasmussen , 249 F .3d 755, 759-761 (8th Cir . . 2001) (denial of
reimbursement for sex reassignment surgery proper where State
Medicaid plan designated sex reassignment surgery as "cosmetic
surgery" and alternate GID treatments available) .
2.

Breast Augmentation Surger y

We consider separately the qualification of petitioner's
breast augmentation surgery as deductible medical care, because
respondent makes the additional argument that this surgery was
not necessary to the .treatment of GID in petitioner's case
because petitioner already had normal breasts before her surgery .
Because petitioner had normal breasts before her surgery,
respondent argues, her breast augmentation surgery was "directed
at improving * * * [her] appearance and [did] not meaningfully

- 61 promote the proper function of the body or prevent or treat
illness or disease ", placing the surgery squarely within th e
section 213(d)(9)(B) definition of "cosmetic surgery" .
Petitioner has not argued, or adduced evidence, that the breast
augmentation surgery ameliorated a deformity within the meaning
of section 213(d)(9)(A) . Accordingly, if the breast augmentation
surgery meets the definition of "cosmetic surgery" in section
213(d)(9)(B), it is not "medical care" that is deductible
pursuant to section 213(a) .
For the reasons discussed below, we find that petitioner has
failed to show that her breast augmentation surgery "[treated]"
GID . The Benjamin . standards provide that breast augmentation
surgery for a male-to-female patient "may be performed if the
physician prescribing hormones and the surgeon have documented
that breast enlargement after undergoing hormone treatment for 18
months is not sufficient for comfort in the social gender role ."
The record contains no documentation from the endocrinologist
prescribing petitioner's hormones at the time of her surgery . To
the extent Ms . Ellaborn's or Dr . Coleman's recommendation letters
to Dr . Meltzer might be considered substitute documentation for
that of the hormone-prescribing physician, Ms . Ellaborn's two
letters are silent concerning the condition of petitioner's
presurgical breasts, while Dr . Coleman's letter states that
petitioner "appears to have significant breast development
secondary to hormone therapy" . The surgeon here, Dr . Meltzer,
recorded in his presurgical notes that petitioner had

- 62 "approximately B cup breasts with a very nice shape ."" Thus,
all of the contemporaneous documentation of the condition of
petitioner's breasts before the surgery suggests that they were
within a normal range of appearance, and there is no
documentation concerning petitioner's comfort level with her
breasts "in the social gender role" .
Dr . Meltzer testified with respect to his notes that his
reference to the "very nice shape" of petitioner's breasts was in
comparison to the breasts of other transsexual males on
feminizing hormones and that petitioner's breasts exhibited
characteristics of gynecomastia, a condition where breast mass is
concentrated closer to the nipple as compared to the breasts of a
genetic female . Nonetheless, given the contemporaneous
documentation of the breasts' apparent normalcy and the failure
to adhere to the Benjamin standards' requirement to document
breast-engendered anxiety to justify the surgery, we find that
petitioner's breast augmentation surgery did not fall within the
treatment protocols of the Benjamin standards and therefore, did
not "treat" GID within the meaning of section 213(d)(9)(B) .
Instead, the surgery merely improved her appearance .
The breast augmentation surgery is therefore "cosmetic
surgery" under the section 213(d)(9)(B) definition unless it
"meaningfully [promoted] the proper function of the body" . The
parties have stipulated that petitioner's breast augmentatio n

51Even petitioner conceded in her testimony that she had "a
fair amount of breast development * * * from the hormones" at the
time of her presurgical consultation with Dr . Meltzer .

63 "did not promote the proper function ofher breasts" . Although
petitioner expressly declined to stipulate that the breast
augmentation "did not meaningfully promote the proper functioning
of her body within the meaning of I .R .C . § 213", we conclude that
the stipulation to which she did agree precludes a finding on
this record, given the failure to adhere to the Benjamin
standards, that the breast augmentation surgery "meaningfully .
[promoted] the proper function of the body" within the meaning of
section 213(d)(9)(B) . Consequently, the breast augmentation
surgery is "cosmetic surgery" that is excluded from deductible
"medical care" .52

52 Respondent also argues that the various surgical
procedures petitioner underwent to feminize her facial features
in 2000 and 2005 demonstrate a propensity for cosmetic surgery
that is relevant in assessing whether petitioner's hormone
therapy and sex reassignment surgery were undertaken for the
purpose of improving petitioner's appearance rather than treating
a disease .
We disagree . The deductibility of petitioner's facial
surgery, undertaken in years other than the year in issue, is not
at issue in this case . However, there is substantial evidence
that such surgery may have served the same therapeutic purposes
as (genital) sex reassignment surgery, and hormone therapy ;
namely, effecting a female appearance in a genetic male . Both
Ms . Ellaborn and Dr . Meltzer testified that petitioner had
masculine facial features which interfered with her passing as
female . The expert testimony confirmed that passing as female is
important to the mental health of a male GID sufferer, and the
Benjamin standards contemplate surgery to feminize facial
features as part of sex reassignment for a male GID sufferer .
Thus, we conclude that the facial surgery does not suggest, as
respondent contends, that petitioner had a propensity for
conventional cosmetic surgery .

64 E .

Medical Necessit y

Finally, respondent argues that petitioner's sex
reassignment surgery was not "medically necessary",53 which
respondent contends is a requirement intended by Congress t o
apply to procedures directed at improving appearance, as
evidenced by certain references to "medically necessary "
procedures in the legislative history of the enactment of the
cosmetic surgery exclusion of section 213(d)(9) .54 Respondent
in effect argues that the legislative history's contrast o f

53Respondent does not make this argument with respect to
petitioner's hormone therapy . His own expert, Dr . Schmidt,
effectively concedes the medical necessity of hormone therapy
when he argues that sex reassignment surgery is not medically
necessary because hormone therapy,is one of the "alternative,
successful methods of managing Gender Identity Disorder short of
surgery . "
"Respondent relies upon the following excerpts from the
report of the Senate Finance Committee issued in connection with
the enactment of the cosmetic surgery exclusion of sec .
213(d)(9) :
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 .
*
* * * [E]xpenses for procedures that are medically
necessary to promote the proper function of the body
and only incidentally affect the patient's appearance
* * * continue to be deductible * * * . [136 Cong . Rec .
30485, 30570 (1990) . ]
The Senate Finance Committee report is set out more fully supra
note 27 . We note that the discussion of sec . . 213(d)(9) in the
conference report issued with respect to the agreed final version
of sec . 213(d)(9) contains no reference to "medical necessity" or
any variant of the phrase . See H . Conf . Rept . 101-964, at 1031
(1990), 1991-2 C .B . 560, 562 .

- 65 nondeductible cosmetic surgery with "medically necessary"
procedures evidences an intent by Congress to impose a
requirement in section 213(d)(9) of medical necessity for the
deduction of procedures affecting appearance . We find it
unnecessary to resolve respondent's claim that section 213(d)(9)
should be interpreted to require a showing of "medical necessity"
notwithstanding the absence of that phrase in the statute . That
is so because respondent's contention would not bar the
deductions at issue, inasmuch as we are persuaded, as discussed
below, that petitioner has shown that her sex reassignmen t
surgery was medically necessary .
Respondent's basis for the claim that petitioner's sex
reassignment surgery was not medically necessary is the expert
report and testimony of his-expert, Dr . Schmidt . Dr . Schmidt
acknowledges in his report that the definition of medica l
necessity "varies according to the defining party" . Dr . Schmidt
never expressly defines the term, but he concludes that sex
reassignment surgery is not medically necessary because (1) no
"community" standard of care requires it (so that a
practitioner's failure to provide the surgery would not
constitute malpractice) and (2) in his view a therapist should
remain neutral regarding the decision to have the surgery--which
makes the surgery, Dr . Schmidt reasons, elective . 55

Take n

55Petitioner's expert Dr . Brown disagrees with the view that
a therapist should remain neutral regarding the decision to
undergo sex reassignment surgery, believing that a patient
experiencing the distress of GID is not well equipped to make a
(continued . . .)

- 66 together, these two factors indicate that the surgery is not
medically necessary, in Dr . Schmidt's view . Respondent has not
shown that Dr . Schmidt's concept of medical necessity is widely
accepted, and it strikes the Court as idiosyncratic and unduly
restrictive . Moreover, Dr . Schmidt also expressed the view that
sex reassignment surgery has "recognized medical and psychiatric
benefits" and is "certainly medically helpful" .
Dr . Schmidt conceded in his report that a significant
segment of those physicians who are knowledgeable concerning GID
believes that sex reassignment surgery is medically necessary,
ranging from those who believe such surgery is generally
medically necessary in treating GID to those who think it is
medically necessary in selected cases . As noted, petitioner's
expert Dr . Brown believes that sex reassignment surgery is often
the only effective treatment for severe GID, and a number of
courts have concurred . Dr . Brown therefore believes the surgery
is medically necessary for severe GID . See also Sadock & Sadock,
supra

("When the patient's gender dysphoria is severe and

intractable, sex reassignment may be the best solution ." )
Several courts have also concluded in a variety of contexts that
sex reassignment surgery for severe GID or transsexualism is
medically necessary . See Meriwether v . Faulkner , 821 F .2d at
412 ;

Pinneke v . Preisser , 623 F .2d at 548 ;
55( . .

Sommers v . Iowa Civi l

.continued)
decision on irreversible surgery . In Dr . Brown's opinion, the
therapist should counsel patients towards less invasive
treatments until they have proven ineffective and the surgery
appears to be the only effective alternative left .

- 67 Rights Co mm n . , 337 N .W .2d at 473 ;
Welfare , 257 N .W .2d at 819 ;

Doe v . Minn . Dept . of Pub .

Davidson v . Aetna Life & Cas . Ins .

Co . , 420 N .Y .S .2d at 453 .
The mental health professional who treated petitioner
concluded that petitioner's GID was severe, that sex reassignment
surgery was medically necessary, and that petitioner's prognosis
without it was poor . Given .Dr . Brown's expert testimony,56 the
judgment of the professional treating petitioner, the agreement
of all three experts that untreated GID can result in selfmutilation and suicide, and, as conceded by Dr . Schmidt, the
views of a significant segment of knowledgeable professionals
that sex reassignment surgery is medically necessary for severe
GID, the Court is persuaded that petitioner's sex reassignment
surgery was medically necessary .
IV .

Conclusio n

The evidence amply supports the conclusions that petitioner
suffered from severe GID, that GID is a well-recognized and
serious mental disorder, and that hormone therapy and sex
reassignment surgery are considered appropriate and effective
treatments for GID by psychiatrists and other mental health
professionals who are knowledgeable concerning the condition .
Given our holdings that GID is a "disease" and that petitioner' s

56When weighing Dr . Brown's and Dr . Schmidt's opposing views
on whether sex reassignment surgery is medically necessary, we
consider that Dr . Brown is widely published in peer-reviewed
medical journals and academic texts on the subject of GID,
whereas Dr . Schmidt is not . Accordingly, there is a reasonable
basis to conclude that Dr . Brown's views are more widely
recognized and accepted in the psychiatric profession .

68 hormone therapy and sex reassignment surgery "[treated]" it,
petitioner has shown the "existence * * * of a disease" and a
payment for goods or services "directly or proximately related"
to its treatment . See Jacobs v . Commissioner , 62 T .C . at 818 .
She likewise satisfies the "but for" test of

Jacobs , which

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

69 Petitioner has shown that her hormone therapy and sex
reassignment surgery treated disease within the meaning of
section 213, and were therefore not cosmetic surgery . Thus,
petitioner's expenditures for these procedures were for "medica l
care" as defined in section 213(d)(1)(A), for which a deduction
is allowed under section 213(a) .
To reflect the foregoing .and concessions by the parties ,

Decision will be entere d
under Rule 155 .

Reviewed by the Court .
COLVIN, COHEN, THORNTON, MARVEL, WHERRY, PARIS, and
MORRISON, JJ . , agree with this majority opinion . .

70 HALPERN, J ., concurring : I substantially agree with the
majority . I write separately to offer one comment on the
majority's rationale for disallowing petitioner's deduction for
her breast augmentation surgery and to offer additional comments
on positions taken in other side opinions .
I .

Breast Augmentation Surger y

I am satisfied with the majority's decision to disallow a
deduction for petitioner's breast augmentation surgery on the
ground that it did not fall within the treatment protocols of the
Benjamin standards . Majority op . p . 62 . For me, that petitioner
failed to prove her doctors adhered to the Benjamin standards
requirement that they document her breast-engendered anxiety is
sufficient to find that the surgery did not fall within those
standards . The majority's added reason, "the breasts' apparent
normalcy", majority op . p . 62, I find superfluous and potentially
misleading . In particular, the observation of Dr . Meltzer,
petitioner's surgeon, in his presurgical note that petitioner's
breasts were of a very nice shape was not an aesthetic judgment
but rather a clinical observation relating to the shape of her
breasts in comparison to the breasts of other transsexual males
on feminizing hormones . Moreover, Dr . Meltzer testified that the
surgery was different from the surgery he would perform on a
biological female : "[I]t was to give her a female looking
breast, which is quite different from a male breast" . In
response to a question from the Court, he testified that the
primary purpose of the breast surgery was not to improve

- 71 petitioner ' s appearance but "to assign her to the appropriate
gender " .
II .

His medical notes should not be taken out of context .

Statutory Interpretatio n
A.

Introductio n

We face a task that is not unusual for us, that is,
interpreting the Internal Revenue Code ,
tools

and we employ a set of

( canons of'construction and the like )

both us and the parties .

that are familiar to

My colleagues raise arguments in

support of respondent that he did not make .'
not addressed by the majority ,

Because they are

I use this opportunity to address

some of them .
B.

Sex Reassignment Surgery, Treatment ,

For the sake of argument ,

and Mitigation

I accept the distinction Judge

Gustafson draws between the words " treat " and "mitigate" .
Nevertheless ,

his argument that sex reassignment surgery only

mitigates (and does not treat )

GID rests on a subtle

misunderstanding of that disease .
For Judge Gustafson ,
that she was a female .

petitioner ' s disease was the " delusion"

Gustafson op . note 9 .

Judge Gustafson

cannot fathom that someone with a healthy male body who believes .
he is female is not sick of mind .
the disease is more than that .

Yet the record suggests that

A biological male who i s

'Clearly the issues before us are important to respondent .
His opening brief is 209 pages long, and his answering brief is
72 pages long . Between them, the two briefs show a total of
eight attorneys assisting the Chief Counsel, in whose name the
briefs are filed . I assume that respondent made all the
arguments that he thought persuasive .

72 convinced he is a woman but does not exhibit clinically
significant distress or impaired ; functioning fails to satisfy at
least one precondition set forth in DSM-IV-TR for a diagnosis of
GID .2 Simply put, the "delusion" itself is not the disease .
Instead, for someone suffering from severe GID (like petitioner)
the medical problem--the disease--is the symptoms . For a
significant part of the medical community, sex reassignment
surgery is an accepted approach to eliminating a sufficient
number of those symptoms so that .a diagnosis of GID will no
longer hold . And if the diagnosis will no longer hold, then the
patient is cured

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Atax-court%3A38d1160cf113114e. Public record. Not legal advice.