Tax court allows deduction for woman's sex change

The U.S. Tax Court ruled Tuesday that a Massachusetts woman should be allowed to deduct the costs of her sex-change operation, a decision that could have broad implications for transgender people. Rhiannon O'Donnabhain, who was born a man, sued the Internal Revenue Service after the agency rejected a $5,000 deduction for approximately $25,000 in medical expenses associated with the sex-change surgery. The IRS said the surgery was cosmetic and not medically necessary. In its decision Tuesday, the tax court said the IRS position was "at best a superficial characterization of the circumstances" that is "thoroughly rebutted by the medical evidence." The legal group Gay & Lesbian Advocates & Defenders, which represented O'Donnabhain, said the ruling could potentially affect thousands of people a year in the U.S. who undergo similar operations.