                                       RHIANNON G. O’DONNABHAIN, PETITIONER v. COMMISSIONER
                                                OF INTERNAL REVENUE, RESPONDENT

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

                                                  In 1997, P, born a genetic male, was diagnosed with gender
                                               identity disorder, a condition recognized in medical reference
                                               texts, in which an individual experiences persistent psycho-
                                               logical discomfort concerning his or her anatomical gender.
                                               Medical professionals who treat gender identity disorder pre-
                                               scribe for its treatment in genetic males, depending on the
                                               severity of the condition, (i) administration of feminizing hor-
                                               mones; (ii) living as a female in public; and (iii) after at least
                                               a year of living as a female, surgical modification of the geni-
                                               tals and, in some circumstances, breasts to resemble those of
                                               a female (sex reassignment surgery). Pursuant to this treat-
                                               ment regimen, P was prescribed feminizing hormones in 1997
                                               and continued to take them through 2001. In 2000, after
                                               plastic surgery to feminize facial features, P began presenting
                                               full time in public as a female. In 2001 P underwent sex
                                               reassignment surgery, including breast augmentation surgery.
                                               P claimed a medical expense deduction under sec. 213, I.R.C.,
                                               for the cost of the surgeries, transportation and other related
                                               expenses, and feminizing hormones, for the taxable year 2001.
                                               R disallowed the deduction. Held: P’s gender identity disorder
                                               is a ‘‘disease’’ within the meaning of sec. 213(d)(1)(A) and
                                               (9)(B), I.R.C. Held, further, P’s hormone therapy and sex
                                               reassignment surgery were ‘‘for the * * * treatment * * * of ’’
                                               and ‘‘[treated]’’ disease within the meaning of sec. 213(d)(1)(A)
                                               and (9)(B), I.R.C., respectively, and consequently the proce-
                                               dures are not ‘‘cosmetic surgery’’ that is excluded from the
                                               definition of ‘‘medical care’’ by sec. 213(d)(9)(A), I.R.C., and
                                               instead the amounts paid for the procedures are expenses for
                                               ‘‘medical care’’ that are deductible pursuant to sec. 213(a),
                                               I.R.C. Held, further, P’s breast augmentation surgery was
                                               ‘‘directed at improving * * * [her] appearance’’ and she has
                                               not shown that the surgery either ‘‘meaningfully [promoted]
                                               the proper function of the body’’ or ‘‘[treated] * * * disease’’
                                               within the meaning of sec. 213(d)(9)(B), I.R.C. Accordingly,
                                               the breast augmentation surgery is ‘‘cosmetic surgery’’ within
                                               the meaning of sec. 213(d)(9)(B), I.R.C., that is excluded from
                                               the definition of deductible ‘‘medical care’’ by sec. 213(d)(9)(A),
                                               I.R.C.

                                         Karen L. Loewy, Bennett H. Klein, Jennifer L. Levi, Wil-
                                      liam E. Halmkin, David J. Nagle, and Amy E. Sheridan, for
                                      petitioner.
                                         Mary P. Hamilton, John R. Mikalchus, Erika B. Cormier,
                                      and Molly H. Donohue, for respondent.
                                      34




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897    PO 20009   Frm 00001   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           35


                                        GALE, Judge: Respondent determined a deficiency of $5,679
                                      in petitioner’s Federal income tax for 2001. After conces-
                                      sions, 1 the issue for decision is whether petitioner may
                                      deduct as a medical care expense under section 213 2
                                      amounts paid in 2001 for hormone therapy, sex reassignment
                                      surgery, and breast augmentation surgery that petitioner
                                      contends were incurred in connection with a condition known
                                      as gender identity disorder.

                                                                          FINDINGS OF FACT

                                         Many of the facts have been stipulated, and the stipulated
                                      facts and attached exhibits are incorporated in our findings
                                      by this reference. The parties have stipulated that this case
                                      is appealable to the U.S. Court of Appeals for the First Cir-
                                      cuit.
                                      I. Petitioner’s Background
                                         Rhiannon G. O’Donnabhain (petitioner) was born a genetic
                                      male with unambiguous male genitalia. However, she 3 was
                                      uncomfortable in the male gender role from childhood and
                                      first wore women’s clothing secretly around age 10. Her
                                      discomfort regarding her gender intensified in adolescence,
                                      and she continued to dress in women’s clothing secretly.
                                         As an adult, petitioner earned a degree in civil
                                      engineering, served on active duty with the U.S. Coast
                                      Guard, found employment at an engineering firm, married,
                                      and fathered three children. However, her discomfort with
                                      her gender persisted. She felt that she was a female trapped
                                      in a male body, and she continued to secretly wear women’s
                                      clothing.
                                         Petitioner’s marriage ended after more than 20 years.
                                      After separating from her spouse in 1992, petitioner’s
                                      feelings that she wanted to be female intensified and grew
                                      more persistent. 4
                                         1 Petitioner concedes that she is not entitled to any deduction for an individual retirement ac-

                                      count contribution, and respondent concedes that petitioner is entitled to deduct $1,369.59 as
                                      medical expenses under sec. 213.
                                         2 Unless otherwise indicated, all section references are to the Internal Revenue Code of 1986,

                                      as amended and in effect in the year in issue, and all Rule references are to the Tax Court Rules
                                      of Practice and Procedure.
                                         3 Reflecting petitioner’s preference, we use the feminine pronoun to refer to her throughout

                                      this Opinion.
                                         4 Petitioner and her spouse were divorced in 1996.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00002   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      36                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      II. Petitioner’s Psychotherapy and Diagnosis
                                         By mid-1996 petitioner’s discomfort with her male gender
                                      role and desire to be female intensified to the point that she
                                      sought out a psychotherapist to address them. After inves-
                                      tigating referrals, petitioner contacted Diane Ellaborn (Ms.
                                      Ellaborn), a licensed independent clinical social worker
                                      (LICSW) and psychotherapist, and commenced psychotherapy
                                      sessions in August 1996.
                                         Although not a medical doctor, Ms. Ellaborn had a mas-
                                      ter’s degree in social work and as an LICSW was authorized
                                      under Massachusetts law to diagnose and treat psychiatric
                                      illnesses. She had specialized training in the diagnosis and
                                      treatment of gender-related disorders.
                                         During petitioner’s psychotherapy Ms. Ellaborn learned of
                                      petitioner’s cross-dressing history and of her longstanding
                                      belief that she was really female despite her male body. Ms.
                                      Ellaborn observed that petitioner was very sad and anxious,
                                      had very low self-esteem, had limited social interactions, and
                                      was obsessed with issues concerning the incongruence
                                      between her perceived gender and her anatomical sex.
                                         In early 1997, after approximately 20 weekly individual
                                      therapy sessions, Ms. Ellaborn’s diagnosis was that peti-
                                      tioner was a transsexual suffering from severe gender
                                      identity disorder (GID), a condition listed in the Diagnostic
                                      and Statistical Manual of Mental Disorders (4th ed. 2000
                                      text revision) (DSM–IV–TR), published by the American Psy-
                                      chiatric Association. The DSM–IV–TR states that a diagnosis
                                      of GID is indicated where an individual exhibits (1) a strong
                                      and persistent desire to be, or belief that he or she is, the
                                      other sex; (2) persistent discomfort with his or her anatom-
                                      ical sex, including a preoccupation with getting rid of pri-
                                      mary or secondary sex characteristics; (3) an absence of any
                                      physical intersex (hermaphroditic) condition; and (4) clini-
                                      cally significant distress or impairment in social, occupa-
                                      tional, or other important areas of functioning as a result of
                                      the discomfort arising from the perceived incongruence
                                      between anatomical sex and perceived gender identity. 5 See
                                         5 In reaching her diagnosis Ms. Ellaborn considered and ruled out other causes—so-called co-

                                      morbid conditions—of petitioner’s symptoms, including psychosis, an earlier diagnosis of atten-
                                      tion deficit/hyperactivity disorder, depression, and transvestic fetishism.
                                         Transvestic fetishism ‘‘occurs in heterosexual (or bisexual) men for whom the cross-dressing
                                      behavior is for the purpose of sexual excitement. Aside from cross-dressing, most individuals




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00003   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           37


                                      DSM–IV–TR    at 581. Under the classification system of the
                                      DSM–IV–TR,   a severity modifier—mild, moderate, or severe—
                                      may be added to any diagnosis. 6 The term ‘‘transsexualism’’
                                      is currently used in the DSM–IV–TR to describe GID symptoms
                                      that are severe or profound. 7
                                         Both the DSM–IV–TR and its predecessor the DSM–IV con-
                                      tain the following ‘‘Cautionary Statement’’:
                                        The purpose of DSM–IV is to provide clear descriptions of diagnostic cat-
                                      egories in order to enable clinicians and investigators to diagnose, commu-
                                      nicate about, study, and treat people with various mental disorders. It is
                                      to be understood that inclusion here, for clinical and research purposes, of
                                      a diagnostic category * * * does not imply that the condition meets legal
                                      or other non-medical criteria for what constitutes mental disease, mental
                                      disorder, or mental disability. * * *

                                      III. Treatment of GID
                                         The World Professional Association for Transgender Health
                                      (WPATH), formerly known as the Harry Benjamin Inter-
                                      national Gender Dysphoria Association, Inc., is an associa-
                                      tion of medical, surgical, and mental health professionals
                                      specializing in the understanding and treatment of GID. 8
                                      WPATH publishes ‘‘Standards of Care’’ for the treatment of
                                      GID (hereinafter Benjamin standards of care or Benjamin
                                      standards). The Benjamin standards of care were originally
                                      with Transvestic Fetishism do not have a history of childhood cross-gender behaviors.’’ DSM–
                                      IV–TR at 580. Petitioner reported to Ms. Ellaborn that she cross-dressed in order to feel more
                                      feminine rather than for purposes of sexual arousal.
                                         6 A modifier of ‘‘severe’’ indicates that there are many more symptoms than those required

                                      to make the diagnosis, or several symptoms that are particularly severe are present, or the
                                      symptoms result in marked impairment in social and occupational functioning beyond the min-
                                      imum threshold required for diagnosis. See DSM–IV–TR at 2.
                                         7 The GID diagnosis was labeled ‘‘transsexualism’’ when it first appeared in the third edition

                                      of the DSM published in 1980 (DSM–III). The fourth edition of the DSM, published in 1994
                                      (DSM–IV), replaced the transsexualism diagnosis with GID and added the criterion for the diag-
                                      nosis that the patient exhibit clinically significant distress or impairment in important areas
                                      of functioning. The DSM–IV underwent a text revision in 2000, resulting in the DSM–IV–TR,
                                      but there are no material differences in the DSM’s treatment of GID as between the DSM–IV
                                      and DSM–IV–TR editions.
                                         Notwithstanding the replacement of the transsexualism diagnosis with GID, the terms
                                      ‘‘transsexualism’’ and ‘‘transsexual’’ are still used generally in psychiatry to refer to severe or
                                      profound GID— or a sufferer thereof.
                                         8 Harry Benjamin, M.D. (1885–1986), was an endocrinologist who in conjunction with mental

                                      health professionals in New York did pioneering work in the study of transsexualism. The par-
                                      ties have stipulated that the term ‘‘gender dysphoria’’ was coined by Dr. Norman Fisk (Dr. Fisk)
                                      in 1973 to describe patients presenting with dissatisfaction and unhappiness with their ana-
                                      tomic and genetic sex and their assigned gender. The parties have further stipulated that, ac-
                                      cording to a 1974 article by Dr. Fisk, transsexualism represents the most extreme form of gen-
                                      der dysphoria.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00004   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      38                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      approved in 1979 and have undergone six revisions through
                                      February 2001.
                                         Summarized, the Benjamin standards of care prescribe a
                                      ‘‘triadic’’ treatment sequence for individuals diagnosed with
                                      GID consisting of (1) hormonal sex reassignment; i.e., the
                                      administration of cross-gender hormones to effect changes in
                                      physical appearance to more closely resemble the opposite
                                      sex; 9 (2) the ‘‘real-life’’ experience (wherein the individual
                                      undertakes a trial period of living full time in society as a
                                      member of the opposite sex); and (3) sex reassignment sur-
                                      gery, consisting of genital sex reassignment and/or nongen-
                                      ital sex reassignment, more fully described as follows:
                                      Genital surgical sex reassignment refers to surgery of the genitalia and/
                                      or breasts performed for the purpose of altering the morphology in order
                                      to approximate the physical appearance of the genetically other esx [sic]
                                      in persons diagnosed as gender dysphoric. * * * Non-genital surgical sex
                                      reassignment refers to any and all other surgical procedures of non-genital,
                                      or non-breast, sites (nose, throat, chin, cheeks, hips, etc.) conducted for the
                                      purpose of effecting a more masculine appearance in a genetic female or
                                      for the purpose of effecting a more feminine appearance in a genetic male
                                      in the absence of identifiable pathology which would warrant such surgery
                                      regardless of the patient’s genetic sex (facial injuries, hermaphroditism,
                                      etc.).

                                         Under the Benjamin standards, an individual must have
                                      the recommendation of a licensed psychotherapist to obtain
                                      hormonal or surgical sex reassignment. Hormonal sex
                                      reassignment requires the recommendation of one
                                      psychotherapist and surgical sex reassignment requires
                                      the recommendations of two. 10 The recommending
                                      psychotherapist should have diagnostic evidence for
                                      transsexualism for a period of at least 2 years, independent
                                      of the patient’s claims.
                                         The Benjamin standards state that hormonal sex reassign-
                                      ment should precede surgical sex reassignment because the
                                      patient’s degree of satisfaction with hormone therapy ‘‘may
                                      indicate or contraindicate later surgical sex reassignment.’’
                                        9 Both parties’ experts agree that administration of cross-gender hormones in genetic males

                                      with GID also has a psychological effect, producing a sense of well-being and a ‘‘calming effect’’.
                                        10 To be qualified to recommend hormonal or surgical sex reassignment, a psychotherapist

                                      must have (1) a master’s degree in clinical behavioral science, and at least one of the
                                      recommenders for surgical sex reassignment must have a doctoral degree in the field; (2) com-
                                      petence in psychotherapy as demonstrated by a State license to practice it; and (3) specialized
                                      competence in sex therapy and gender identity disorders as demonstrated by supervised clinical
                                      experience and continuing education.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00005   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                       O’DONNABHAIN v. COMMISSIONER                                           39


                                      The Benjamin standards further state that ‘‘Genital sex
                                      reassignment shall be preceded by a period of at least 12
                                      months during which time the patient lives full-time in the
                                      social role of the genetically other sex.’’ The standards pro-
                                      vide that breast augmentation surgery may be performed as
                                      part of sex reassignment surgery for a male-to-female patient
                                      ‘‘if the physician prescribing hormones and the surgeon have
                                      documented that breast enlargement after undergoing hor-
                                      mone treatment for 18 months is not sufficient for comfort in
                                      the social gender role.’’
                                      IV. Ms. Ellaborn’s Treatment Plan for Petitioner
                                        After diagnosing severe GID in petitioner in early 1997, Ms.
                                      Ellaborn administered a course of treatment that followed
                                      the Benjamin standards of care. 11
                                            A. Petitioner’s Hormone Treatments
                                         In February 1997 Ms. Ellaborn referred petitioner to an
                                      endocrinologist for feminizing hormone therapy, and peti-
                                      tioner commenced taking hormones in September 1997. 12
                                      She remained on feminizing hormones continuously through
                                      the taxable year in issue (2001). 13
                                         After beginning hormone therapy petitioner told Ms.
                                      Ellaborn that she felt calmer and better emotionally and that
                                      she felt positive about her physical changes. Ms. Ellaborn
                                      viewed petitioner’s positive reactions to hormone therapy as
                                      validation of the GID diagnosis.
                                         Petitioner advised her former spouse and children of her
                                      GID diagnosis in 1997 and 1998, respectively. 14

                                            B. Petitioner’s ‘‘Real-Life’’ Experience
                                        In consultation with Ms. Ellaborn, petitioner decided to
                                      undertake the Benjamin standards’ ‘‘real-life’’ experience; i.e.,
                                      to present in public as female on a full-time basis in March
                                           11 Petitioner
                                                      attended monthly individual therapy sessions throughout most of 1997.
                                           12 Petitioner
                                                      was hesitant about starting hormones and changing her appearance too quickly.
                                      She was concerned about the impact on her children and coworkers. Petitioner’s 16-year-old son
                                      was living with her at the time, and petitioner wished to postpone significant changes in her
                                      appearance until after her son had graduated from high school and begun college.
                                        13 Petitioner also commenced electrolysis treatments to remove body hair in September 1997

                                      and continued them through 2005. The deductibility of the expenses related to electrolysis is
                                      not at issue.
                                        14 The children’s reactions were characterized by embarrassment, anger, denial, and with-

                                      drawal.




VerDate 0ct 09 2002   13:27 May 23, 2013    Jkt 372897     PO 20009   Frm 00006   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      40                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      2000. Petitioner legally changed her name from Robert
                                      Donovan to Rhiannon G. O’Donnabhain and arranged to
                                      have the gender designation on her driver’s license changed,
                                      on the basis of her GID diagnosis. 15 She underwent surgery
                                      to feminize her facial features, 16 and with the cooperation of
                                      her employer commenced presenting as a female at work
                                      around April of that year. Petitioner informed Ms. Ellaborn
                                      that her transition at work went smoothly and that the ‘‘real-
                                      life’’ experience had been ‘‘incredibly easy’’. Ms. Ellaborn
                                      viewed petitioner’s positive response to her ‘‘real-life’’ experi-
                                      ence as further validation of the GID diagnosis.
                                           C. Petitioner’s Sex Reassignment Surgery
                                         Petitioner’s anxiety as a result of having male genitalia
                                      persisted, 17 however, and Ms. Ellaborn concluded that her
                                      prognosis without genital surgical sex reassignment (sex
                                      reassignment surgery) was poor, in that petitioner’s anxiety
                                      over the lack of congruence between her perceived gender
                                      and her anatomical sex would continue in the absence of sur-
                                      gery and would impair her ability to function normally in
                                      society. In November 2000 Ms. Ellaborn wrote a referral
                                      letter to Dr. Toby Meltzer (Dr. Meltzer), a board-certified
                                      plastic and reconstructive surgeon, with over 10 years’
                                      experience specializing in sex reassignment surgery, to
                                      secure a place for petitioner on his waiting list.
                                         After three additional therapy sessions with petitioner in
                                      mid-2001, Ms. Ellaborn concluded that petitioner had satis-
                                      fied or exceeded all of the Benjamin standards’ criteria for
                                      sex reassignment surgery, including time spent satisfactorily
                                      on feminizing hormones and in the ‘‘real-life’’ experience. In
                                      July 2001 Ms. Ellaborn wrote a second letter to Dr. Meltzer
                                      certifying petitioner’s GID diagnosis and satisfaction of the
                                        15 Petitioner also carried with her a letter from Ms. Ellaborn explaining the GID diagnosis,

                                      to be used in the event she was confronted by authorities for using a sex-segregated facility such
                                      as a restroom or a changing room.
                                        16 Ms. Ellaborn had observed that, notwithstanding 18 months of hormone therapy, petitioner

                                      had distinctly male facial features which interfered with her ‘‘passing’’ as female. Ms. Ellaborn
                                      referred petitioner to a plastic surgeon who in March 2000 performed procedures designed to
                                      feminize petitioner’s facial features, including a rhinoplasty (nose reshaping), a facelift, and a
                                      tracheal shave (reducing cartilage of the ‘‘Adam’s apple’’). Petitioner was dissatisfied with the
                                      initial results, and in December 2000 the surgeon performed further surgery to revise the effects
                                      of the earlier procedures. The surgeon also gave petitioner a Botox treatment at that time. The
                                      deductibility of the foregoing procedures is not at issue.
                                        17 In one instance, petitioner held a knife and had an urge to cut off her penis.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00007   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                        O’DONNABHAIN v. COMMISSIONER                                          41


                                      Benjamin standards’ criteria for sex reassignment surgery,
                                      and formally recommending petitioner for the sur-
                                      gery. Another licensed psychotherapist with a doctoral degree
                                      in clinical psychology, Dr. Alex Coleman (Dr. Coleman),
                                      examined petitioner and provided a second recommendation
                                      for her sex reassignment surgery, as required by the Ben-
                                      jamin standards. Dr. Coleman’s letter to Dr. Meltzer
                                      observed that petitioner ‘‘appears to have significant breast
                                      development secondary to hormone therapy’’.
                                        Petitioner, anticipating the formal recommendations for
                                      her surgery, went for a consultation and examination by Dr.
                                      Meltzer in June 2001 at his offices in Portland, Oregon.
                                      Dr. Meltzer concluded that petitioner was a good candidate
                                      for sex reassignment surgery. Dr. Meltzer’s notes of his phys-
                                      ical examination of petitioner state: ‘‘Examination of her
                                      breasts reveal [sic] approximately B cup breasts with a very
                                      nice shape.’’
                                        In mid-October 2001 petitioner returned to Portland, and
                                      she underwent sex reassignment surgery on October 19,
                                      2001. The procedures that Dr. Meltzer carried out included
                                      surgical removal of the penis and testicles and creation of a
                                      vaginal space using genital skin and tissue. The procedures
                                      were designed to surgically reconfigure petitioner’s male
                                      genitalia to create female genitalia both in appearance and
                                      in function, by reconstructing the penile glans into a neo-clit-
                                      oris, making sexual arousal and intercourse possible.
                                        Dr. Meltzer also performed breast augmentation surgery
                                      designed to make petitioner’s breasts, which had experienced
                                      some development as a result of feminizing hormones, more
                                      closely resemble the breasts of a genetic female.
                                        In May 2002 Dr. Meltzer performed followup surgery on
                                      petitioner to refine the appearance of her genitals and
                                      remove scar tissue. In February 2005 Dr. Meltzer performed
                                      further surgery on petitioner’s face, designed to feminize her
                                      facial features. 18
                                      V. Petitioner’s Claim for a Medical Expense Deduction
                                        During 2001 petitioner incurred and paid the following
                                      expenses (totaling $21,741) in connection with her hormone
                                      therapy, sex reassignment surgery, and breast augmentation
                                           18 The   deductibility of these procedures undertaken in 2002 and 2005 is not at issue.




VerDate 0ct 09 2002   13:27 May 23, 2013    Jkt 372897    PO 20009    Frm 00008   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      42                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      surgery: (1) $19,195 to Dr. Meltzer for surgical procedures,
                                      including $14,495 for vaginoplasty and other procedures,
                                      $4,500 for breast augmentation, and $200 towards a portion
                                      of petitioner’s postsurgical stay at Dr. Meltzer’s facility; (2)
                                      $60 for medical equipment; (3) $1,544 in travel and lodging
                                      costs away from home for presurgical consultation and sur-
                                      gery; (4) $300 to Ms. Ellaborn for therapy; (5) $260 for the
                                      consultation for a second referral letter for surgery; and (6)
                                      $382 for hormone therapy. These payments were not com-
                                      pensated for by insurance or otherwise.
                                        On her Federal income tax return for 2001, petitioner
                                      claimed an itemized deduction for the foregoing expenditures
                                      as medical expenses, which respondent subsequently dis-
                                      allowed in a notice of deficiency.
                                      VI. Expert Testimony
                                           A. Petitioner’s Expert: Dr. Brown
                                         Petitioner’s expert, Dr. George R. Brown (Dr. Brown), is a
                                      licensed physician, board certified in adult psychiatry by the
                                      American Board of Psychiatry and Neurology. Dr. Brown has
                                      been a member of the American Psychiatric Association since
                                      1983 and was elected a Distinguished Fellow of that
                                      organization in 2003. At the time of trial Dr. Brown was a
                                      professor and associate chairman of the Department of
                                      Psychiatry at East Tennessee State University and chief of
                                      psychiatry at James H. Quillen Veterans Affairs Medical
                                      Center in Johnson City, Tennessee.
                                         Dr. Brown has been an active member of WPATH since
                                      1987, including serving on its board of directors, and he
                                      participated in the development of the Benjamin standards of
                                      care. He has seen approximately 500 GID patients either in
                                      a clinical setting or as an academic researcher. Dr. Brown
                                      has published numerous papers in peer-reviewed medical
                                      journals and written several book chapters on topics related
                                      to GID, including those in the Merck Manuals, one of the
                                      most widely used medical reference texts in the world.
                                         Citing its recognition in the DSM–IV–TR, standard medical
                                      reference texts, and World Health Organization publications,
                                      Dr. Brown contends that there is general agreement in main-
                                      stream psychiatry that GID is a legitimate mental disorder.
                                      Dr. Brown indicates that there are no biological or laboratory




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00009   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           43


                                      tests that may be used to diagnose GID but notes the same
                                      is true of virtually all of the mental disorders listed in the
                                      DSM–IV–TR.
                                         In Dr. Brown’s view, proper medical treatment of a person
                                      diagnosed with GID includes extended psychotherapy and one
                                      or more of the triadic therapies in the Benjamin standards.
                                      Dr. Brown is not aware of any case in which psychotherapy
                                      alone was effective in treating severe GID. For individuals
                                      with severe GID, Dr. Brown believes completion of the entire
                                      triadic sequence, i.e., through sex reassignment surgery, is
                                      usually medically necessary to ‘‘cure or mitigate the distress
                                      and maladaption caused by GID.’’
                                         In Dr. Brown’s opinion, it is also important to the mental
                                      health of a male with severe GID to be able to ‘‘pass’’ convinc-
                                      ingly in public as female—that is, to be perceived as female
                                      by members of the public. Failure to pass exacerbates the
                                      anxieties associated with GID. Passing includes the use of
                                      sex-segregated facilities such as restrooms and locker rooms,
                                      where a failure to pass can result in public humiliation,
                                      assault, or arrest. Genetic males with GID sometimes have
                                      distinctly male facial features that make it difficult to pass,
                                      absent surgery to feminize facial features.
                                         According to Dr. Brown, autocastration, autopenectomy,
                                      and suicide have been reported in patients who did not
                                      receive appropriate treatment for their GID. Dr. Brown
                                      rejects the idea that sex reassignment surgery is comparable
                                      to cosmetic surgery or is undertaken to improve one’s appear-
                                      ance, in view of the social stigma (including rejection by
                                      family and employment discrimination) and the pain and
                                      complications typically associated with such surgery. More-
                                      over, Dr. Brown observes, normal genetic males generally do
                                      not desire to have their penis and testicles removed. Such a
                                      desire is regarded in the psychiatric literature as a likely
                                      manifestation of psychosis (usually schizophrenia) or GID, fol-
                                      lowed by a range of other less likely explanations. In Dr.
                                      Brown’s opinion, people undergo sex reassignment surgery
                                      because of the severity of their GID symptoms and the lack
                                      of any other known effective treatment.
                                         In Dr. Brown’s view, the scientific literature demonstrates
                                      positive therapeutic outcomes from sex reassignment sur-




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00010   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      44                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      gery. He cites widely used psychiatric reference texts that
                                      reach the same conclusion. 19
                                        On the basis of a review of petitioner’s medical records and
                                      a telephone interview with petitioner, Dr. Brown opined that
                                      petitioner was properly diagnosed with GID and petitioner’s
                                      treatments, including sex reassignment surgery, were appro-
                                      priate and medically necessary.
                                           B. Respondent’s Expert: Dr. Schmidt
                                         Respondent’s expert, Dr. Chester W. Schmidt, Jr. (Dr.
                                      Schmidt), is a licensed physician, board certified in psychi-
                                      atry by the American Board of Psychiatry and Neurology,
                                      and a member of the American Psychiatric Association. At
                                      the time of trial Dr. Schmidt was a professor of psychiatry
                                      at the Johns Hopkins University School of Medicine, the
                                      chief medical director, Johns Hopkins Health Care, and chair
                                      of the medical board, Johns Hopkins Bayview Medical
                                      Center.
                                         Dr. Schmidt cofounded the Sexual Behavior Consultation
                                      Unit of the Johns Hopkins Hospital, a clinical, teaching, and
                                      research program devoted to the evaluation and treatment of
                                      sexual disorders, in 1971. Since that time he has been active
                                      in the clinical and teaching aspects of transsexualism, having
                                      participated in the evaluation of approximately 12 patients
                                      per year diagnosed with GID. However, he has not directly
                                      treated or managed a patient with GID since the mid-1980s,
                                      and his current clinical activity consists of evaluating new
                                      cases of GID. Dr. Schmidt’s expert report states that he has
                                      ‘‘participated in the publication’’ of several peer-reviewed
                                      medical journal articles about GID, but none has been identi-
                                      fied for which he was a listed author, and he has never writ-
                                      ten a chapter on the subject in a medical reference text.
                                         In his expert report, Dr. Schmidt asserts that the validity
                                      of the GID diagnosis remains the subject of debate within the
                                      psychiatric profession and that he currently is undecided
                                      about its validity. 20 However, 10 months before submitting
                                        19 See Green, ‘‘Gender Identity Disorder in Adults’’, in New Oxford Textbook of Psychiatry 915

                                      (Gelder, et al., eds., Oxford Univ. Press 2000); Green & Blanchard, ‘‘Gender Identity Disorders’’,
                                      in Kaplan & Sadock’s Comprehensive Textbook of Psychiatry 1660 (Sadock & Sadock, eds., 7th
                                      ed., Lippincott Williams & Wilkins 2000); Levine, ‘‘Sexual Disorders’’, in Psychiatry 1492
                                      (Tasman, et al., eds., 2d ed., John Wiley & Sons 2005).
                                        20 Dr. Schmidt’s report states that he is uncertain that GID is a mental disorder in the light

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




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00011   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           45


                                      his expert report, Dr. Schmidt provided a diagnosis of GID as
                                      an expert in a U.S. District Court proceeding and continued
                                      to make the diagnosis regularly through the time of trial, as
                                      do other practitioners at the Johns Hopkins sexual disorders
                                      clinic he cofounded. Further, Dr. Schmidt states that the GID
                                      diagnosis is taught to psychiatrists in training at his and
                                      other medical schools and is a condition with which they
                                      must be familiar.
                                         Dr. Schmidt agreed that GID requires treatment. He has
                                      observed that ‘‘you can’t walk around day after day being
                                      ambiguous about your gender identity. It will tear you apart
                                      psychologically’’. Dr. Schmidt likewise agreed that untreated
                                      GID in males can sometimes lead to autopenectomy,
                                      autocastration, and suicide.
                                         Dr. Schmidt believes that the Benjamin standards of care
                                      are merely guidelines rather than true standards of care, in
                                      that they do not meet the legal threshold of a ‘‘community’’
                                      standard, the departure from which would constitute mal-
                                      practice. Dr. Schmidt further believes that the Benjamin
                                      standards enjoy only limited acceptance in American medi-
                                      cine generally. He is unaware, however, of any significant
                                      disagreement with the Benjamin standards within the psy-
                                      chiatric profession, other than a minority that considers sex
                                      reassignment surgery unethical. Dr. Schmidt agrees with the
                                      Benjamin standards’ treatment protocols, with the exception
                                      that he believes psychotherapy should be mandatory rather
                                      than merely recommended for candidates for sex reassign-
                                      ment. All GID patients at the sexual disorders clinic where
                                      Dr. Schmidt practices are advised to become familiar with
                                      the Benjamin standards of care.
                                         Dr. Schmidt believes that cross-gender hormone therapy
                                      and sex reassignment surgery have recognized medical and
                                      psychiatric benefits for persons suffering from GID, including
                                      reinforcement of an internal sense of consistency and balance
                                      in their gender identity. Dr. Schmidt has also expressed the
                                      view that once a genetic male with GID makes the decision
                                      to transition to a female identity, everything that reinforces
                                      the identity is helpful for psychological well-being. However,
                                      in his opinion a therapist should remain neutral regarding
                                      whether a patient should undergo hormone therapy or the
                                      the lack of a scientifically supported etiology of the condition.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00012   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      46                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      surgery because, Dr. Schmidt believes, there is insufficient
                                      scientific evidence of the procedures’ efficacy in treating GID.
                                      A therapist should accordingly only take a position when
                                      there are contraindications to the procedures, in his opinion.
                                         Given his view that failure to adhere to the Benjamin
                                      standards of care would not constitute malpractice and that
                                      a therapist should remain neutral regarding the administra-
                                      tion of hormone therapy or sex reassignment surgery, Dr.
                                      Schmidt concludes that the procedures are elective and not
                                      medically necessary. He acknowledges, however, that the
                                      issue of the medical necessity of sex reassignment surgery is
                                      ‘‘contentious and variable within American medicine.’’
                                         Finally, while noting that there is some evidence that GID
                                      may have a neurological cause, Dr. Schmidt believes that
                                      there is no conclusive scientific proof that GID is the result
                                      of a genetic or congenital abnormality.
                                           C. Respondent’s Expert: Dr. Dietz
                                         Respondent’s expert, Dr. Park Dietz (Dr. Dietz), is a
                                      licensed physician and board certified in psychiatry by the
                                      American Board of Psychiatry and Neurology. Like Dr.
                                      Brown, he is a Distinguished Fellow of the American Psy-
                                      chiatric Association. At the time of trial Dr. Dietz was a clin-
                                      ical professor of psychiatry and behavioral sciences at the
                                      University of California at Los Angeles School of Medicine.
                                      Dr. Dietz’ specialty is forensic psychiatry, and he has written
                                      approximately 100 professional publications, mostly on
                                      sexual, criminal, and antisocial behavior from the standpoint
                                      of forensic psychiatry, in peer-reviewed journals, reference
                                      text chapters, and other media. Dr. Dietz was recognized as
                                      an expert in forensic psychiatry. He was retained by
                                      respondent for the purpose of addressing the question of
                                      whether GID or transsexualism is a disease or illness.
                                         It is Dr. Dietz’ opinion that GID is a mental disorder,
                                      susceptible of a correct or incorrect diagnosis, but not a dis-
                                      ease or an illness because it has not been shown to arise
                                      from a pathological process within the body—a necessary
                                      condition for a disease in Dr. Dietz’ view. 21 While acknowl-
                                      edging that commentators on the subject have advanced at
                                         21 Dr. Dietz believes that ‘‘illness’’ is simply ‘‘the recognized presence of disease, usually as

                                      a result of the host experiencing signs or symptoms, but sometimes as a result of an incidental
                                      finding by a clinician or the observations of a third party.’’




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00013   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           47


                                      least three possible ‘‘sufficient conditions’’ for the presence of
                                      disease (namely, discomfort, dysfunction, or pathology), Dr.
                                      Dietz considers pathology the appropriate sufficient condi-
                                      tion. Thus, in Dr. Dietz’ opinion, disease is defined as follows:
                                      To be a disease, a condition must arise as a result of a pathological
                                      process. It is not necessary that this process be fully known or understood,
                                      but it is necessary that the pathology occur within the individual and
                                      reflect abnormal structure or function of the body at the gross, microscopic,
                                      molecular, biochemical, or neuro-chemical levels. * * *

                                         Citing the cautionary statement in the DSM–IV–TR (to the
                                      effect that inclusion of a condition in a diagnostic category of
                                      the DSM does not imply that the condition meets legal criteria
                                      for mental disease), Dr. Dietz asserts that the designation of
                                      a condition as a mental disorder in the DSM–IV–TR does not
                                      indicate that the condition is a disease. To be a disease, a
                                      mental disorder must have a demonstrated organic or
                                      biological origin in the individual, in his view.
                                         Dr. Dietz testified that since qualification as a disease
                                      under his definition depends upon a demonstration of the
                                      condition’s organic origins, a condition may be a disease but
                                      not known as such, pending scientific discoveries concerning
                                      its etiology. For example, panic disorder and obsessive-
                                      compulsive disorder are now understood to have an organic
                                      basis, but their etiology was only discovered as a result of
                                      laboratory advances within the last decade or so. Thus, both
                                      conditions are diseases under Dr. Dietz’ definition, but would
                                      not have been recognized as such 20 years ago. Dr. Dietz con-
                                      firmed that bulimia 22 is psychologically unhealthy but not a
                                      disease under his formulation because it has no dem-
                                      onstrated organic etiology. Dr. Dietz was unable to say
                                      whether anorexia 23 is a disease under his definition because
                                      he was unfamiliar with the current state of scientific knowl-
                                      edge of anorexia’s etiology. In Dr. Dietz’ view, post-traumatic
                                      stress disorder is not a disease as he defines the term, but
                                      an injury.
                                         Dr. Dietz agrees that GID is sometimes associated with
                                      autopenectomy, autocastration, and suicide.
                                        22 As confirmed by Dr. Dietz, bulimia is a mental disorder characterized by binge eating fol-

                                      lowed by inappropriate compensatory behaviors to avoid weight gain, such as induced vomiting.
                                        23 As confirmed by Dr. Dietz, anorexia is a mental disorder in which an individual refuses to

                                      maintain a minimally normal body weight, is phobic regarding weight gain, and exhibits a dis-
                                      turbance in perception of the shape or size of his or her body.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00014   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      48                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                                                                  OPINION

                                      I. Medical Expense Deductions Under Section 213
                                           A. In General
                                        Section 213(a) allows a deduction for expenses paid during
                                      the taxable year for medical care that are not compensated
                                      for by insurance or otherwise and to the extent that such
                                      expenses exceed 7.5 percent of adjusted gross income. 24 In
                                      addition, section 213(d)(1)(B) and (2) provides that certain
                                      amounts paid for transportation and lodging, respectively,
                                      may qualify as amounts paid for medical care under section
                                      213(a) if a taxpayer’s travel away from home is primarily for
                                      and essential to receiving medical care. 25
                                           B. Definition of Medical Care
                                         Congress first provided an income tax deduction for med-
                                      ical expenses in 1942. See Revenue Act of 1942, ch. 619, sec.
                                      127(a), 56 Stat. 825. The original provision was codified as
                                      section 23(x) of the 1939 Internal Revenue Code and read as
                                      follows:
                                      SEC. 23. DEDUCTIONS FROM GROSS INCOME.
                                           In computing net income there shall be allowed as deductions:

                                                               *    *   *   *  *   *   *
                                        (x) MEDICAL, DENTAL, ETC., EXPENSES.—Except as limited under para-
                                      graph (1) or (2), expenses paid during the taxable year * * * for medical
                                      care of the taxpayer * * *. The term ‘‘medical care’’, as used in this sub-
                                      section, shall include amounts paid for the diagnosis, cure, mitigation,
                                      treatment, or prevention of disease, or for the purpose of affecting any
                                      structure or function of the body * * *.

                                      At the time, the Senate Committee on Finance commented
                                      on the new deduction for medical expenses in relevant part
                                      as follows:

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

                                      for medical care. The parties have stipulated that the feminizing hormones petitioner purchased
                                      in 2001 were a prescribed drug within the meaning of sec. 213(b) and (d)(3), but respondent
                                      does not stipulate that the hormones were for the treatment of an illness or disease within the
                                      meaning of sec. 213.
                                        25 The parties have stipulated that if any part of petitioner’s sex reassignment surgery is de-

                                      termined by the Court to be deductible under sec. 213, then petitioner’s travel and lodging costs
                                      incurred in connection with her consultation and surgery by Dr. Meltzer are also deductible.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00015   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           49


                                        The term ‘‘medical care’’ is broadly defined to include amounts paid for
                                      the diagnosis, cure, mitigation, treatment, or prevention of disease, or for
                                      the purpose of affecting any structure or function of the body. It is not
                                      intended, however, that a deduction should be allowed for any expense
                                      that is not incurred primarily for the prevention or alleviation of a physical
                                      or mental defect or illness.

                                      S. Rept. 1631, 77th Cong., 2d sess. 95–96 (1942), 1942–2 C.B.
                                      504, 576–577 (emphasis added); see Stringham v. Commis-
                                      sioner, 12 T.C. 580, 583–584 (1949) (medical care is defined
                                      in broad and comprehensive language, but it does not include
                                      items which are primarily nondeductible personal living
                                      expenses), affd. 183 F.2d 579 (6th Cir. 1950).
                                         The core definition of ‘‘medical care’’ originally set forth in
                                      section 23(x) of the 1939 Code has endured over time and is
                                      currently found in section 213(d)(1)(A), which provides as fol-
                                      lows:
                                           SEC. 213 (d). DEFINITIONS.—For purposes of this section—
                                             (1) The term ‘‘medical care’’ means amounts paid—
                                               (A) for the diagnosis, cure, mitigation, treatment, or prevention of
                                             disease, or for the purpose of affecting any structure or function of the
                                             body * * *

                                      Thus, since the inception of the medical expense deduction,
                                      the definition of deductible ‘‘medical care’’ has had two
                                      prongs. The first prong covers amounts paid for the ‘‘diag-
                                      nosis, cure, mitigation, treatment, or prevention of disease’’
                                      and the second prong covers amounts paid ‘‘for the purpose
                                      of affecting any structure or function of the body’’.
                                         The regulations interpreting the statutory definition of
                                      medical care echo the description of medical care in the
                                      Senate Finance Committee report accompanying the original
                                      enactment. The regulations state in relevant part:
                                        (e) Definitions—(1) General. (i) The term ‘‘medical care’’ includes the
                                      diagnosis, cure, mitigation, treatment, or prevention of disease. Expenses
                                      paid for ‘‘medical care’’ shall include those paid for the purpose of affecting
                                      any structure or function of the body or for transportation primarily for
                                      and essential to medical care. * * *
                                        (ii) * * * Deductions for expenditures for medical care allowable under
                                      section 213 will be confined strictly to expenses incurred primarily for the
                                      prevention or alleviation of a physical or mental defect or illness. * * *
                                        [Sec. 1.213–1(e)(1), Income Tax Regs.; emphasis added.]

                                      Notably, the regulations, mirroring the language of the
                                      Finance Committee report, treat ‘‘disease’’ as used in the




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00016   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      50                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      statute as synonymous with ‘‘a physical or mental defect or
                                      illness.’’ The language equating ‘‘mental defect’’ with ‘‘dis-
                                      ease’’ was in the first version of the regulations promulgated
                                      in 1943 and has stood unchanged since. See T.D. 5234, 1943
                                      C.B. 119, 130. In addition, to qualify as ‘‘medical care’’ under
                                      the regulations, an expense must be incurred ‘‘primarily’’ for
                                      alleviation of a physical or mental defect, and the defect
                                      must be specific. ‘‘[A]n expenditure which is merely beneficial
                                      to the general health of an individual, such as an expendi-
                                      ture for a vacation, is not an expenditure for medical care.’’
                                      Sec. 1.213–1(e)(1)(ii), Income Tax Regs.
                                         Given the reference to ‘‘mental defect’’ in the legislative
                                      history and the regulations, it has also long been settled that
                                      ‘‘disease’’ as used in section 213 can extend to mental dis-
                                      orders. See, e.g., Fischer v. Commissioner, 50 T.C. 164, 173
                                      n.4 (1968) (‘‘That mental disorders can be ‘disease’ within the
                                      meaning of [section 213(d)(1)(A)] is no longer open to ques-
                                      tion.’’); Starrett v. Commissioner, 41 T.C. 877 (1964);
                                      Hendrick v. Commissioner, 35 T.C. 1223 (1961).
                                         In Jacobs v. Commissioner, 62 T.C. 813 (1974), this Court
                                      reviewed the legislative history of section 213 and syn-
                                      thesized the caselaw to arrive at a framework for analysis of
                                      disputes concerning medical expense deductions. Noting that
                                      the medical expense deduction essentially carves a limited
                                      exception out of the general rule of section 262 that ‘‘per-
                                      sonal, living, or family expenses’’ are not deductible, the
                                      Court observed that a taxpayer seeking a deduction under
                                      section 213 must show: (1) ‘‘the present existence or
                                      imminent probability of a disease, defect or illness—mental
                                      or physical’’ and (2) a payment ‘‘for goods or services directly
                                      or proximately related to the diagnosis, cure, mitigation,
                                      treatment, or prevention of the disease or illness.’’ Id. at 818.
                                      Moreover, where the expenditures are arguably not ‘‘wholly
                                      medical in nature’’ and may serve a personal as well as med-
                                      ical purpose, they must also pass a ‘‘but for’’ test: the tax-
                                      payer must ‘‘prove both that the expenditures were an essen-
                                      tial element of the treatment and that they would not have
                                      otherwise been incurred for nonmedical reasons.’’ Id. at
                                      819. 26
                                        26 Applying the foregoing principles, the Court in Jacobs v. Commissioner, 62 T.C. 813 (1974),

                                      concluded that the expenses of the taxpayer’s divorce, even though the divorce was rec-
                                      ommended by the taxpayer’s psychiatrist and was beneficial to the taxpayer’s mental health,




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00017   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                               51


                                           C. Definition of Cosmetic Surgery
                                        The second prong of the statutory definition of ‘‘medical
                                      care’’, concerning amounts paid ‘‘for the purpose of affecting
                                      any structure or function of the body’’, was eventually
                                      adjudged too liberal by Congress. The Internal Revenue
                                      Service, relying on the second prong, had determined in two
                                      revenue rulings that deductions were allowed for amounts
                                      expended for cosmetic procedures (such as facelifts, hair
                                      transplants, and hair removal through electrolysis) because
                                      the procedures were found to affect a structure or function of
                                      the body within the meaning of section 213(d)(1)(A). See Rev.
                                      Rul. 82–111, 1982–1 C.B. 48 (hair transplants and hair
                                      removal); Rev. Rul. 76–332, 1976–2 C.B. 81 (facelifts); see
                                      also Mattes v. Commissioner, 77 T.C. 650 (1981) (hair trans-
                                      plants to treat premature baldness deductible under section
                                      213).
                                        In 1990 Congress responded to these rulings by amending
                                      section 213 to include new subsection (d)(9) which, generally
                                      speaking, excludes cosmetic surgery from the definition of
                                      deductible medical care. See Omnibus Budget Reconciliation
                                      Act of 1990, Pub. L. 101–508, sec. 11342(a), 104 Stat. 1388–
                                      471. A review of the legislative history of section 213(d)(9)
                                      shows that Congress deemed the amendment necessary to
                                      clarify that deductions for medical care do not include
                                      amounts paid for ‘‘an elective, purely cosmetic treatment’’. H.
                                      Conf. Rept. 101–964, at 1031 (1990), 1991–2 C.B. 560, 562;
                                      see also 136 Cong. Rec. 30485, 30570 (1990) (Senate Finance
                                      Committee report language on Omnibus Budget Reconcili-
                                      ation Act of 1990). 27
                                      were not deductible medical expenses because the divorce would have been undertaken even ab-
                                      sent the taxpayer’s depression.
                                        27 The bill as initially passed in the House of Representatives did not include a provision ad-

                                      dressing cosmetic surgery; this provision originated in the Senate. The report of the Senate Fi-
                                      nance Committee, which was informally printed in the Congressional Record, contrasted ‘‘cos-
                                      metic’’ procedures with ‘‘medically necessary procedures’’ as follows:
                                      For purposes of the medical expense deduction, the IRS generally does not distinguish between
                                      procedures which are medically necessary and those which are purely cosmetic.

                                                          *         *          *          *           *         *        *
                                      * * * Expenses for purely cosmetic procedures that are not medically necessary are, in essence,
                                      voluntary personal expenses, which like other personal expenditures (e.g., food and clothing)
                                      generally should not be deductible in computing taxable income.

                                                          *         *          *          *           *         *        *
                                                                                                          Continued




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00018   Fmt 3851       Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      52                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                           Section 213(d)(9) defines ‘‘cosmetic surgery’’ as follows:
                                           SEC. 213(d). DEFINITIONS.—For purposes of this section—

                                                                 *   *     *  *    *   *   *
                                             (9) COSMETIC SURGERY.—
                                                (A) IN GENERAL.—The term ‘‘medical care’’ does not include cosmetic
                                             surgery or other similar procedures, unless the surgery or procedure
                                             is necessary to ameliorate a deformity arising from, or directly related
                                             to, a congenital abnormality, a personal injury resulting from an
                                             accident or trauma, or disfiguring disease.
                                                (B) COSMETIC SURGERY DEFINED.—For purposes of this paragraph,
                                             the term ‘‘cosmetic surgery’’ means any procedure which is directed at
                                             improving the patient’s appearance and does not meaningfully pro-
                                             mote the proper function of the body or prevent or treat illness or dis-
                                             ease.

                                      In sum, section 213(d)(9)(A) provides the general rule that
                                      the term ‘‘medical care’’ does not include ‘‘cosmetic surgery’’
                                      (as defined) unless the surgery is necessary to ameliorate
                                      deformities of various origins. Section 213(d)(9)(B) then
                                      defines ‘‘cosmetic surgery’’ as any procedure that is directed
                                      at improving the patient’s appearance but excludes from the
                                      definition any procedure that ‘‘meaningfully [promotes] the
                                      proper function of the body’’ or ‘‘[prevents] or [treats] illness
                                      or disease’’. There appear to be no cases of precedential value
                                      interpreting the cosmetic surgery exclusion of section
                                      213(d)(9). 28
                                           II. The Parties’ Positions
                                        Respondent contends that petitioner’s hormone therapy,
                                      sex reassignment surgery, and breast augmentation surgery
                                      are nondeductible ‘‘cosmetic surgery or other similar proce-
                                      dures’’ 29 under section 213(d)(9) because they were directed
                                      at improving petitioner’s appearance and did not treat an ill-
                                      ness or disease, meaningfully promote the proper function of
                                      the body, or ameliorate a deformity. Although respondent
                                      * * * [U]nder the provision, procedures such as hair removal electrolysis, hair transplants,
                                      lyposuction [sic], and facelift operations generally are not deductible. In contrast, expenses for
                                      procedures that are medically necessary to promote the proper function of the body and only
                                      incidentally affect the patient’s appearance or expenses for the treatment of a disfiguring condi-
                                      tion arising from a congenital abnormality, personal injury or trauma, or disease (such as recon-
                                      structive surgery following removal of a malignancy) continue to be deductible * * *.
                                         28 Al-Murshidi v. Commissioner, T.C. Summary Opinion 2001–185, construed sec. 213(d)(9)

                                      but was decided under sec. 7463 and may not be treated as precedent. See sec. 7463(b).
                                         29 Respondent contends that petitioner’s hormone therapy was a ‘‘similar procedure’’ within

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




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00019   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           53


                                      concedes that GID is a mental disorder, respondent contends,
                                      relying on the expert testimony of Dr. Dietz, that GID is not
                                      a disease for purposes of section 213 because it does not arise
                                      from an organic pathology within the human body that
                                      reflects ‘‘abnormal structure or function of the body at the
                                      gross, microscopic, molecular, biochemical, or neurochemical
                                      levels.’’ Respondent further contends that the procedures at
                                      issue did not treat disease because there is no scientific proof
                                      of their efficacy in treating GID and that the procedures were
                                      cosmetic surgery because they were not medically necessary.
                                      Finally, respondent contends that petitioner did not have
                                      GID, that it was incorrectly diagnosed, and that therefore the
                                      procedures at issue did not treat a disease.
                                        Petitioner maintains that she is entitled to deduct the cost
                                      of the procedures at issue on the grounds that GID is a well-
                                      recognized mental disorder in the psychiatric field that ‘‘falls
                                      squarely within the meaning of ‘disease’ because it causes
                                      serious, clinically significant distress and impairment of
                                      functioning.’’ Since widely accepted standards of care pre-
                                      scribe hormone treatment, sex reassignment surgery, and, in
                                      appropriate circumstances, breast augmentation surgery for
                                      genetic males suffering from GID, expenditures for the fore-
                                      going constitute deductible ‘‘medical care’’ because a direct or
                                      proximate relationship exists between the expenditures and
                                      the ‘‘diagnosis, cure, mitigation, treatment, or prevention of
                                      disease’’, petitioner argues. Morever, petitioner contends,
                                      because the procedures at issue treated a ‘‘disease’’ as used
                                      in section 213, they are not ‘‘cosmetic surgery’’ as defined in
                                      that section. 30
                                      III. Analysis
                                        The availability of the medical expense deduction for the
                                      costs of hormonal and surgical sex reassignment for a
                                      transsexual individual presents an issue of first impression.
                                        30 Petitioner also argues that the expenditures for the procedures at issue are deductible be-

                                      cause they affected a structure or function of the body (within the meaning of sec. 213(d)(1)(A))
                                      and were not ‘‘cosmetic surgery’’ under sec. 213(d)(9) because they were not ‘‘directed at improv-
                                      ing the patient’s appearance’’ and because they ‘‘meaningfully [promoted] the proper function
                                      of the body’’ (within the meaning of sec. 213(d)(9)(B)). Given our conclusion, discussed herein-
                                      after, that the expenditures for petitioner’s hormone therapy and sex reassignment surgery are
                                      deductible because they ‘‘[treated] * * * disease’’ within the meaning of sec. 213(d)(1)(A) and
                                      (9)(B), we need not resolve the foregoing issues with respect to those expenditures. We consider
                                      petitioner’s arguments with respect to the breast augmentation surgery more fully infra.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00020   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      54                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                           A. Statutory Definitions
                                         Determining whether sex reassignment procedures are
                                      deductible ‘‘medical care’’ or nondeductible ‘‘cosmetic surgery’’
                                      starts with the meaning of ‘‘treatment’’ and ‘‘disease’’ as used
                                      in section 213. Both the statutory definition of ‘‘medical care’’
                                      and the statute’s exclusion of ‘‘cosmetic surgery’’ from that
                                      definition depend in part upon whether an expenditure or
                                      procedure is for ‘‘treatment’’ of ‘‘disease’’. Under section
                                      213(d)(1)(A), if an expenditure is ‘‘for the * * * treatment
                                      * * * of disease’’, it is deductible ‘‘medical care’’; under sec-
                                      tion 213(d)(9)(B), if a procedure ‘‘[treats] * * * disease’’, it is
                                      not ‘‘cosmetic surgery’’ that is excluded from the definition of
                                      ‘‘medical care’’. 31
                                         Because the only difference between the quoted phrases in
                                      these two subparagraphs is the use of the noun form ‘‘treat-
                                      ment’’ versus the verb form ‘‘treat’’, we see no meaningful
                                      distinction between them. ‘‘Code provisions generally are to
                                      be interpreted so congressional use of the same words
                                      indicates an intent to have the same meaning apply’’. Elec.
                                      Arts, Inc. v. Commissioner, 118 T.C. 226, 241 (2002); see also
                                      Commissioner v. Keystone Consol. Indus., Inc., 508 U.S. 152,
                                      159 (1993); United States v. Olympic Radio & Television,
                                      Inc., 349 U.S. 232, 236 (1955); Zuanich v. Commissioner, 77
                                      T.C. 428, 442–443 (1981). Consequently, the determination of
                                      whether something is a ‘‘treatment’’ of a ‘‘disease’’ is the
                                      same throughout section 213, whether for purposes of
                                      showing that an expenditure is for ‘‘medical care’’ under sec-
                                      tion 213(d)(1)(A) or that a procedure is not ‘‘cosmetic surgery’’
                                      under section 213(d)(9)(B). A showing that a procedure con-
                                      stitutes ‘‘treatment’’ of a ‘‘disease’’ both precludes ‘‘cosmetic
                                      surgery’’ classification under section 213(d)(9) and qualifies
                                      the procedure as ‘‘medical care’’ under section 213(d)(1)(A). 32
                                        31 As noted, respondent contends that petitioner’s hormone therapy is a ‘‘similar procedure’’

                                      within the meaning of the sec. 213(d)(9)(A) exclusion from ‘‘medical care’’ of ‘‘cosmetic surgery
                                      or other similar procedures’’. Respondent does not contend, however, that the hormone therapy’s
                                      status as a ‘‘similar procedure’’ within the meaning of sec. 213(d)(9)(A) ipso facto causes the
                                      therapy to be excluded from ‘‘medical care’’. Instead, by arguing that the hormone therapy was
                                      directed at improving petitioner’s appearance and did not treat an illness or disease, respondent
                                      concedes that a ‘‘similar procedure’’ as used in sec. 213(d)(9)(A) is delimited by the definition
                                      of ‘‘cosmetic surgery’’ in sec. 213(d)(9)(B)—that is, that a ‘‘similar procedure’’ is excluded from
                                      the definition of ‘‘medical care’’ if it ‘‘is directed at improving the patient’s appearance and does
                                      not meaningfully promote the proper function of the body or prevent or treat illness or disease’’.
                                        32 The parties have stipulated that petitioner did not undertake hormone therapy or sex reas-

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




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00021   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           55


                                         Congress’ reuse of the terms ‘‘treat’’ and ‘‘disease’’ in
                                      defining ‘‘cosmetic surgery’’ in section 213(d)(9)(B) triggers a
                                      second principle of statutory construction. Given that the
                                      phrase ‘‘treatment * * * of disease’’ as used in the section
                                      213(d)(1)(A) definition of ‘‘medical care’’ had been the subject
                                      of considerable judicial and administrative construction when
                                      Congress incorporated the phrase into the definition of ‘‘cos-
                                      metic surgery’’ in 1990, it ‘‘had acquired a settled judicial and
                                      administrative interpretation’’. Commissioner v. Keystone
                                      Consol. Indus., Inc., supra at 159. In these circumstances ‘‘it
                                      is proper to accept the already settled meaning of the
                                      phrase’’. Id. Therefore, the pre-1990 caselaw and regulations
                                      construing ‘‘treatment’’ and ‘‘disease’’ for purposes of the sec-
                                      tion 213(d)(1)(A) definition of ‘‘medical care’’ are applicable to
                                      the interpretation of those words as used in the section
                                      213(d)(9)(B) definition of ‘‘cosmetic surgery’’.
                                           B. Is GID a ‘‘Disease’’?
                                         Petitioner argues that she is entitled to deduct her
                                      expenditures for the procedures at issue because they were
                                      treatments for GID, a condition that she contends is a ‘‘dis-
                                      ease’’ for purposes of section 213. Respondent maintains that
                                      petitioner’s expenditures did not treat ‘‘disease’’ because GID
                                      is not a ‘‘disease’’ within the meaning of section 213. Central
                                      to his argument is respondent’s contention that ‘‘disease’’ as
                                      used in section 213 has the meaning postulated by respond-
                                      ent’s expert, Dr. Dietz; namely, ‘‘a condition * * * [arising]
                                      as a result of a pathological process * * * [occurring] within
                                      the individual and [reflecting] abnormal structure or function
                                      of the body at the gross, microscopic, molecular, biochemical,
                                      or neuro-chemical levels.’’
                                         On brief respondent cites the foregoing definition from Dr.
                                      Dietz’ expert report and urges it upon the Court as the
                                      meaning of ‘‘disease’’ as used in section 213; namely, that a
                                      ‘‘disease’’ for this purpose must have a demonstrated organic
                                      or physiological origin in the individual. Consequently, GID is

                                      arising from an accident or trauma, or a disfiguring disease. Petitioner has neither argued nor
                                      adduced evidence that the foregoing procedures ameliorated a deformity arising from, or directly
                                      related to, a congenital abnormality. See sec. 213(d)(9)(A). We consider petitioner’s arguments
                                      concerning the breast augmentation surgery more fully infra.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00022   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      56                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      not a ‘‘disease’’ because it has ‘‘no known organic pathology’’,
                                      respondent argues. 33
                                         However, this use of expert testimony to establish the
                                      meaning of a statutory term is generally improper. ‘‘[E]xpert
                                      testimony proffered solely to establish the meaning of a law
                                      is presumptively improper.’’ United States v. Prigmore, 243
                                      F.3d 1, 18 n.3 (1st Cir. 2001). The meaning of a statutory
                                      term is a pure question of law that is ‘‘exclusively the domain
                                      of the judge.’’ Nieves-Villanueva v. Soto-Rivera, 133 F.3d 92,
                                      99 (1st Cir. 1997); see also United States v. Mikutowicz, 365
                                      F.3d 65, 73 (1st Cir. 2004); Bammerlin v. Navistar Intl.
                                      Transp. Corp., 30 F.3d 898, 900 (7th Cir. 1994); Snap-Drape,
                                      Inc. v. Commissioner, 105 T.C. 16, 19–20 (1995), affd. 98 F.3d
                                      194, 198 (5th Cir. 1996). Closely analogous is S. Jersey Sand
                                      Co. v. Commissioner, 30 T.C. 360, 364 (1958), affd. 267 F.2d
                                      591 (3d Cir. 1959), where this Court refused to consider the
                                      expert testimony of a geologist concerning the meaning of the
                                      term ‘‘quartzite’’ as used in the Internal Revenue Code.
                                         While the Court admitted Dr. Dietz’ expert report and
                                      allowed him to testify over petitioner’s objection, the use to
                                      which respondent now seeks to put his testimony is
                                      improper, and we disregard it for that purpose. 34 The
                                      meaning of ‘‘disease’’ as used in section 213 must be resolved
                                      by the Court, using settled principles of statutory construc-
                                      tion, including reference to the Commissioner’s interpretive
                                      regulations, the legislative history, and caselaw precedent. 35
                                         As a legal argument for the proper interpretation of ‘‘dis-
                                      ease’’, respondent’s position is meritless. Respondent cites no
                                      authority, other than Dr. Dietz’ expert testimony, in support
                                      of his interpretation, and we have found none. To the con-
                                      trary, respondent’s interpretation is flatly contradicted by
                                      nearly a half century of caselaw. Numerous cases have
                                      treated mental disorders as ‘‘diseases’’ for purposes of section
                                      213 without regard to any demonstrated organic or physio-
                                      logical origin or cause. See Fay v. Commissioner, 76 T.C. 408
                                         33 The experts all agree and the Court accepts, for purposes of deciding this case, that no or-

                                      ganic or biological cause of GID has been demonstrated.
                                         34 In contrast, the testimony of the other two experts presents specialized medical knowledge

                                      concerning the nature of GID. These facts bear upon whether GID should be considered to qual-
                                      ify as a ‘‘disease’’, as the Court interprets that term.
                                         35 Dr. Dietz’ testimony as a forensic psychiatrist is proper and useful regarding other matters,

                                      such as the state of knowledge concerning organic origins of mental conditions, and the Court
                                      relies on the testimony for certain other purposes, as discussed infra.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00023   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           57


                                      (1981); Jacobs v. Commissioner, 62 T.C. at 818; Fischer v.
                                      Commissioner, 50 T.C. 164 (1968); Starrett v. Commissioner,
                                      41 T.C. 877 (1964); Hendrick v. Commissioner, 35 T.C. 1223
                                      (1961); Sims v. Commissioner, T.C. Memo. 1979–499. These
                                      cases found mental conditions to be ‘‘diseases’’ where there
                                      was evidence that mental health professionals regarded the
                                      condition as creating a significant impairment to normal
                                      functioning and warranting treatment. This Court’s discus-
                                      sion in Fay v. Commissioner, supra at 414–415, is represent-
                                      ative:
                                      While the record is not too clear with respect to the precise nature of the
                                      mental conditions of * * * [the taxpayer’s children], we are satisfied that
                                      they both suffered from some sort of learning disability, accompanied by
                                      emotional stress, which prevented, or at least interfered with, their ability
                                      to cope in a normal academic environment. While this condition may or
                                      may not have been psychiatric, it was certainly a mental handicap or
                                      defect which we think may be considered a mental disease or defect for
                                      purposes of section 213. It was the type of disorder that the petitioners,
                                      their expert educational consultants, a psychiatrist, and the staff of the
                                      DLD program[36] thought could be mitigated or alleviated, or possibly
                                      cured, by the special attention and individual programing given to the chil-
                                      dren at the DLD. While these mental disorders may not have been severe
                                      enough to require psychiatric or psychological treatment, they were severe
                                      enough to prevent the children from acquiring a normal education without
                                      some help, and we think any treatment, whether rendered by medical
                                      people or specially trained educators, directly related to the alleviation of
                                      such mental disorders so that the recipient may obtain a normal, or more
                                      normal, education, qualifies as medical care under the statute.

                                      In Fischer v. Commissioner, supra at 173–174, there was a
                                      similar absence of any discussion of organic or physiological
                                      origins in this Court’s analysis of the ‘‘conventional meaning’’
                                      of ‘‘disease’’.
                                      The first question presented is whether petitioner’s son, Don, was suffering
                                      from a ‘‘disease’’ as that term is used in the statute and the applicable
                                      regulation. Given that term its conventional meaning, we think the evi-
                                      dence is clear * * * that Don was suffering from a disease when he
                                      entered Oxford Academy. As detailed in our findings, the report of the
                                      Institute of the Pennsylvania Hospital states that as of that date Don had
                                      ‘‘not evolved the usual ‘defense’ or integrating mechanisms necessary for
                                      dealing maturely, realistically and in an organized fashion, with the prob-
                                      lems of his environment. * * * ’’ * * * a psychiatrist who treated Don for

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

                                      program at the taxpayer’s children’s school for children with learning disabilities. Fay v. Com-
                                      missioner, 76 T.C. 408, 410 (1981).




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00024   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      58                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      almost a year, described him as a child with ‘‘significant neurotic blocks
                                      against learning.’’ * * * [Fn. ref. omitted.]

                                      See also Jacobs v. Commissioner, supra at 818 (taxpayer’s
                                      ‘‘severe depression’’ as evidenced by his psychiatrist’s testi-
                                      mony is ‘‘disease’’ for purposes of section 213); Hendrick v.
                                      Commissioner, supra at 1236 (‘‘emotional insecurity’’ of child
                                      is a ‘‘disease’’ for purposes of section 213); Sims v. Commis-
                                      sioner, supra (‘‘disease’’ for purposes of section 213 found
                                      although ‘‘record does not contain a precise characterization
                                      of * * * [the taxpayer’s son’s] condition in medical termi-
                                      nology, there is ample evidence to support a finding that he
                                      suffered from some sort of learning disability, accompanied
                                      by emotional or psychiatric problems’’). We have also consid-
                                      ered a condition’s listing in a diagnostic reference text as
                                      grounds for treating the condition as a ‘‘disease’’, without
                                      inquiry into the condition’s etiology. In Starrett v. Commis-
                                      sioner, supra at 878 & n.1, 880–882, a reviewed Opinion, we
                                      treated ‘‘anxiety reaction’’ as a ‘‘disease’’ for purposes of sec-
                                      tion 213, pointing to the condition’s recognition in the Amer-
                                      ican Medical Association’s Standard Nomenclature of Dis-
                                      eases and Operations (5th ed. 1961).
                                         The absence of any consideration of etiology in the caselaw
                                      is consistent with the legislative history and the regulations.
                                      Both treat ‘‘disease’’ as synonymous with ‘‘a physical or
                                      mental defect’’, which suggests a more colloquial sense of the
                                      term ‘‘disease’’ was intended than the narrower (and more
                                      rigorous) interpretation for which respondent contends.
                                         In addition, in the context of mental disorders, it is vir-
                                      tually inconceivable that Congress could have intended to
                                      confine the coverage of section 213 to conditions with dem-
                                      onstrated organic origins when it enacted the provision in
                                      1942, because physiological origins for mental disorders were
                                      not widely recognized at the time. As Dr. Dietz confirmed in
                                      his testimony, the physiological origins of various well-recog-
                                      nized mental disorders—for example, panic disorder and
                                      obsessive-compulsive disorder—were discovered only about a
                                      decade ago. Moreover, Dr. Dietz confirmed that bulimia
                                      would not constitute a ‘‘disease’’ under his definition, because
                                      bulimia has no demonstrated organic origin, nor would post-
                                      traumatic stress disorder. Dr. Dietz was unable to say
                                      whether anorexia would meet the definition because he was




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00025   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           59


                                      uncertain regarding the current state of scientific knowledge
                                      of its origins. Petitioner’s expert, Dr. Brown, testified without
                                      challenge that most mental disorders listed in the DSM–IV–TR
                                      do not have demonstrated organic causes. Thus, under the
                                      definition of ‘‘disease’’ respondent advances, many well-recog-
                                      nized mental disorders, perhaps most, would be excluded
                                      from coverage under section 213—a result clearly at odds
                                      with the intent of Congress (and the regulations) to provide
                                      deductions for the expenses of alleviating ‘‘mental defects’’
                                      generally.
                                         In sum, we reject respondent’s interpretation of ‘‘disease’’
                                      because it is incompatible with the stated intent of the regu-
                                      lations and legislative history to cover ‘‘mental defects’’ gen-
                                      erally and is contradicted by a consistent line of cases finding
                                      ‘‘disease’’ in the case of mental disorders without regard to
                                      any demonstrated etiology.
                                         Having rejected respondent’s contention that ‘‘disease’’ as
                                      used in section 213 requires a demonstrated organic origin,
                                      we are left with the question whether the term should be
                                      interpreted to encompass GID. On this score, respondent,
                                      while conceding that GID is a mental disorder, argues that
                                      GID is ‘‘not a significant psychiatric disorder’’ but instead is
                                      a ‘‘social construction’’—a ‘‘social phenomenon’’ that has been
                                      ‘‘medicalized’’. Petitioner argues that GID is a ‘‘disease’’ for
                                      purposes of section 213 because it is well recognized in main-
                                      stream psychiatric literature, including the DSM–IV–TR, as a
                                      legitimate mental disorder that ‘‘causes serious, clinically
                                      significant distress and impairment of functioning’’.
                                         For the reasons already noted and those discussed below,
                                      we conclude that GID is a ‘‘disease’’ within the meaning of
                                      section 213. We start with the two caselaw factors influ-
                                      encing a finding of ‘‘disease’’ in the context of mental condi-
                                      tions: (1) A determination by a mental health professional
                                      that the condition created a significant impairment to normal
                                      functioning, warranting treatment, see Fay v. Commissioner,
                                      76 T.C. 408 (1981); Jacobs v. Commissioner, 62 T.C. 813
                                      (1974); Fischer v. Commissioner, 50 T.C. 164 (1968);
                                      Hendrick v. Commissioner, 35 T.C. 1223 (1961), or (2) a
                                      listing of the condition in a medical reference text, see
                                      Starrett v. Commissioner, 41 T.C. 877 (1964). Both factors
                                      involve deference by a court to the judgment of medical
                                      professionals.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00026   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      60                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                        As noted in our findings, GID is listed as a mental disorder
                                      in the DSM–IV–TR, which all three experts agree is the pri-
                                      mary diagnostic tool of American psychiatry. 37 See also
                                      Danaipour v. McLarey, 286 F.3d 1, 17 (1st Cir. 2002)
                                      (characterizing the DSM–IV as ‘‘the leading psychiatric diag-
                                      nostic manual’’). GID or transsexualism is also listed in
                                      numerous medical reference texts, with descriptions of their
                                      characteristics that are similar to those in the DSM–IV–TR. 38
                                      See Starrett v. Commissioner, supra.
                                        Even if one accepts respondent’s expert Dr. Schmidt’s
                                      assertion that the validity of the GID diagnosis is subject to
                                      some debate in the psychiatric profession, the widespread
                                      recognition of the condition in medical literature persuades
                                      the Court that acceptance of the GID diagnosis is the pre-
                                      vailing view. Dr. Schmidt’s own professed misgivings about
                                      the diagnosis are not persuasive, given that he continues to
                                      employ the diagnosis in practice, believes that psychiatrists
                                      must be familiar with it, and recently gave a GID diagnosis
                                      as an expert in another court proceeding. 39 On balance, the
                                         37 We recognize that the DSM–IV–TR cautions that inclusion of a diagnostic category therein

                                      ‘‘does not imply that the condition meets legal or other non-medical criteria for what constitutes
                                      mental disease, mental disorder, or mental disability.’’ For purposes of our decision in this case,
                                      GID’s inclusion in the DSM–IV–TR (and its predecessors) evidences widespread recognition of
                                      the condition in the psychiatric profession. Indisputably, the issue of whether GID is a ‘‘disease’’
                                      for purposes of sec. 213 is for this Court to decide, and we do so on the basis of a range of fac-
                                      tors, including GID’s inclusion in the DSM–IV–TR.
                                         38 See, e.g., American Medical Association, Complete Medical Encyclopedia 595, 1234 (Random

                                      House 2003); The Dictionary of Medical Terms 157 (4th ed. 2004); Dorland’s Illustrated Medical
                                      Dictionary, http://www.mercksource.com/pp/us/cnslhlldorlands; ‘‘Gender Identity Disorder
                                      and Transsexualism’’, Merck Manuals Online Medical Library, http://www.merck.com./mmpe/
                                      print/sec15/ch203/ch203b.html; Miller-Keane Encyclopedia and Dictionary of Medicine, Nursing,
                                      and Allied Health 728, 1808 (2003); National Institutes of Health, U.S. National Library of Med-
                                      icine,     MedlinePlus     Medical     Encyclopedia,     http://nlm.nih.gov/medlineplus/ency/article/
                                      001527.html; Sloane-Dorland Annotated Medical-Legal Dictionary 202–203, 233, 291, 310, 744
                                      (1987).
                                         Transsexualism is also listed and described in the International Classification of Diseases,
                                      Ninth Revision, Clinical Modification (6th ed.) a publication of the American Medical Association
                                      used in the United States for assigning codes to various diagnoses and procedures. Similarly,
                                      various gender identity disorders, including transsexualism, are listed and described in the
                                      International Classification of Diseases, Tenth Revision, a 1992 publication of the World Health
                                      Organization that classifies diseases and health related problems.
                                         Respondent stresses on brief that he stipulated that the foregoing publications were medical
                                      reference texts but did not stipulate the truth of their contents. Except where otherwise indi-
                                      cated, we consider medical reference texts solely for the fact that they recognize GID or
                                      transsexualism and treatments for the condition.
                                         39 Dr. Schmidt attributed his misgivings in part to the ‘‘lack of a scientifically supported eti-

                                      ology of the condition’’, but as petitioner’s expert Dr. Brown pointed out, the same could be said
                                      of most mental disorders listed in the DSM.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00027   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           61


                                      evidence amply demonstrates that GID is a widely recognized
                                      and accepted diagnosis in the field of psychiatry.
                                         Second, GID is a serious, psychologically debilitating condi-
                                      tion. Respondent’s characterization of the condition on brief
                                      as a ‘‘social construction’’ and ‘‘not a significant psychiatric
                                      disorder’’ is undermined by both of his own expert witnesses
                                      and the medical literature in evidence. All three expert wit-
                                      nesses agreed that, absent treatment, GID in genetic males is
                                      sometimes associated with autocastration, autopenectomy,
                                      and suicide. Respondent’s expert Dr. Schmidt asserts that
                                      remaining ambiguous about gender identity ‘‘will tear you
                                      apart psychologically’’. Petitioner’s expert Dr. Brown likewise
                                      testified that GID produces significant distress and
                                      maladaption. Psychiatric reference texts, established as reli-
                                      able authority by Dr. Brown’s testimony, confirm the fore-
                                      going. See Fed. R. Evid. 803(18). One such text states:
                                        Cross-gender identity (gender identity contradicted by anatomical sex
                                      characteristics) in adulthood virtually always causes distress to the indi-
                                      vidual. * * * Cross-gender identity at any age, therefore, is appropriately
                                      regarded as a disorder and a possible reason for clinical intervention.
                                      * * * [Green & Blanchard, ‘‘Gender Identity Disorders’’, in Kaplan &
                                      Sadock’s Comprehensive Textbook of Psychiatry 1646, 1659 (Sadock &
                                      Sadock, eds., 2000).]

                                      Another psychiatric reference text states that ‘‘Prior to rec-
                                      ognition of transsexualism as a disorder deserving medical
                                      and psychiatric attention many patients self-mutilated or
                                      committed suicide out of despair.’’ Green, ‘‘Gender Identity
                                      Disorder in Adults’’, in New Oxford Textbook of Psychiatry
                                      914 (Gelder, et al., eds., 2000).
                                         Ms. Ellaborn concluded that petitioner exhibited clinically
                                      significant impairment from GID, to the extent that she des-
                                      ignated petitioner’s condition as ‘‘severe’’ under the DSM–IV–
                                      TR standards. Her diagnosis was supported by another doc-
                                      toral-level mental health professional and by Dr. Brown. The
                                      severity of petitioner’s impairment, coupled with the near
                                      universal recognition of GID in diagnostic and other medical
                                      reference texts, bring petitioner’s condition in line with the
                                      circumstances where a mental condition has been deemed a
                                      ‘‘disease’’ in the caselaw under section 213.
                                         Third, respondent’s position that GID is not a significant
                                      psychiatric disorder is at odds with the position of every U.S.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00028   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      62                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      Court of Appeals that has ruled on the question of whether
                                      GID poses a serious medical need for purposes of the Eighth
                                      Amendment, which has been interpreted to require that pris-
                                      oners receive adequate medical care. See Estelle v. Gamble,
                                      429 U.S. 97, 103 (1976). In Estelle v. Gamble, supra at 104,
                                      the U.S. Supreme Court held that ‘‘deliberate indifference to
                                      serious medical needs of prisoners constitutes the ‘unneces-
                                      sary and wanton infliction of pain’ * * * proscribed by the
                                      Eighth Amendment.’’ The U.S. Courts of Appeals have
                                      accordingly interpreted Estelle v. Gamble, supra, as estab-
                                      lishing a two-prong test for an Eighth Amendment violation:
                                      it must be shown that (1) the prisoner had a ‘‘serious medical
                                      need’’ which (2) was met with ‘‘deliberate indifference’’ by
                                      prison officials. See, e.g., Cuoco v. Moritsugu, 222 F.3d 99,
                                      106 (2d Cir. 2000) (applying the Eighth Amendment test to
                                      a pretrial detainee); White v. Farrier, 849 F.2d 322, 325–327
                                      (8th Cir. 1988).
                                         Seven of the U.S. Courts of Appeals that have considered
                                      the question have concluded that severe GID or
                                      transsexualism constitutes a ‘‘serious medical need’’ for pur-
                                      poses of the Eighth Amendment. See De’lonta v. Angelone,
                                      330 F.3d 630, 634 (4th Cir. 2003); Allard v. Gomez, 9 Fed.
                                      Appx. 793, 794 (9th Cir. 2001); Cuoco v. Moritsugu, supra;
                                      Brown v. Zavaras, 63 F.3d 967, 970 (10th Cir. 1995); Phillips
                                      v. Mich. Dept. of Corr., 932 F.2d 969 (6th Cir. 1991), affg. 731
                                      F. Supp. 792 (W.D. Mich. 1990); White v. Farrier, supra;
                                      Meriwether v. Faulkner, 821 F.2d 408, 411–413 (7th Cir.
                                      1987); see also Maggert v. Hanks, 131 F.3d 670, 671 (7th Cir.
                                      1997) (describing gender dysphoria as a ‘‘profound psychiatric
                                      disorder’’). 40 No U.S. Court of Appeals has held otherwise. 41
                                         Deliberate indifference ‘‘requires that a prison official actu-
                                      ally know of and disregard an objectively serious condition,
                                      medical need, or risk of harm.’’ De’lonta v. Angelone, supra
                                      at 634. Many of the foregoing opinions either found that
                                      ‘‘deliberate indifference’’ had not been shown or remanded to
                                        40 The U.S. Supreme Court has also treated transsexualism as a serious medical condition,

                                      relying on its listing in the DSM–III and the American Medical Association’s Encyclopedia of
                                      Medicine (1989). See Farmer v. Brennan, 511 U.S. 825, 829 (1994).
                                        41 Two Courts of Appeals have considered, but found it unnecessary to decide, whether GID

                                      or transsexualism constitutes a serious medical need for purposes of the Eighth Amendment.
                                      See Praylor v. Tex. Dept. of Criminal Justice, 430 F.3d 1208 (5th Cir. 2005), withdrawing 423
                                      F.3d 524 (5th Cir. 2005) (holding that transsexualism constitutes a serious medical need for
                                      Eighth Amendment purposes); Farmer v. Moritsugu, 163 F.3d 610, 614–615 (D.C. Cir. 1998).




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00029   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           63


                                      the District Court for further proceedings regarding that
                                      point, but they reflect a clear consensus that GID constitutes
                                      a medical condition of sufficient seriousness that it triggers
                                      the Eighth Amendment requirement that prison officials not
                                      ignore or disregard it. 42
                                         In view of (1) GID’s widely recognized status in diagnostic
                                      and psychiatric reference texts as a legitimate diagnosis, (2)
                                      the seriousness of the condition as described in learned trea-
                                      tises in evidence and as acknowledged by all three experts in
                                      this case; (3) the severity of petitioner’s impairment as found
                                      by the mental health professionals who examined her; (4) the
                                      consensus in the U.S. Courts of Appeals that GID constitutes
                                      a serious medical need for purposes of the Eighth Amend-
                                      ment, we conclude and hold that GID is a ‘‘disease’’ for pur-
                                      poses of section 213.
                                           C. Did Petitioner Have GID?
                                         Respondent also contends that petitioner was not correctly
                                      diagnosed with GID, citing his expert Dr. Schmidt’s conten-
                                      tions that certain comorbid conditions such as depression or
                                      transvestic fetishism had not been adequately ruled out as
                                      explanations of petitioner’s condition.
                                         We find that petitioner’s GID diagnosis is substantially sup-
                                      ported by the record. Ms. Ellaborn was licensed under State
                                      law to make such a diagnosis. A second licensed professional
                                      concurred, as did petitioner’s expert, a recognized authority
                                      in the field. Ms. Ellaborn’s testimony concerning her diag-
                                      nosis was persuasive. She considered and ruled out comorbid
                                      conditions, including depression and transvestic fetishism,
                                      and she believed her initial diagnosis was confirmed by peti-
                                      tioner’s experience with the steps in the triadic therapy
                                      sequence. 43
                                        42 But see Maggert v. Hanks, 131 F.3d 670 (7th Cir. 1997), where the Court of Appeals for

                                      the Seventh Circuit, after concluding that the plaintiff inmate had failed to establish that he
                                      had gender dysphoria, observed in dicta that since treatment for gender dysphoria is ‘‘protracted
                                      and expensive’’ and the Eighth Amendment does not require that a prisoner be given medical
                                      care ‘‘that is as good as he would receive if he were a free person’’, the Amendment ‘‘does not
                                      entitle a prison inmate to curative treatment for his gender dysphoria.’’ Id. at 671–672.
                                        43 Petitioner’s response to the administration of cross-gender hormones is especially persuasive

                                      regarding the diagnosis. Ms. Ellaborn observed that petitioner’s reaction to the effects of the
                                      hormones was essentially positive; that is, the hormones engendered a sense of well-being and
                                      a calming effect in petitioner—a well-documented phenomenon in genetic males suffering from
                                      GID who receive feminizing hormones, confirmed by both respondent’s and petitioner’s experts.
                                      By contrast, as Dr. Brown observed, when feminizing hormones are administered to non-GID-
                                                                                                    Continued




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00030   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      64                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                         Absent evidence of a patent lack of qualifications, see, e.g.,
                                      Flemming v. Commissioner, T.C. Memo. 1980–583 (rejecting
                                      diagnosis of cancer and kidney disease by dentist), this Court
                                      has generally deferred, in section 213 disputes, to the judg-
                                      ment of the medical professionals who treated the patient,
                                      see, e.g. Fay v. Commissioner, 76 T.C. at 414; Jacobs v.
                                      Commissioner, 62 T.C. at 818; Fischer v. Commissioner, 50
                                      T.C. at 173–174. All three witnesses who supported peti-
                                      tioner’s GID diagnosis interviewed petitioner. Since Dr.
                                      Schmidt did not, his analysis is entitled to considerably less
                                      weight, and we conclude that there is no persuasive basis to
                                      doubt the diagnosis.
                                           D. Whether Cross-Gender Hormones, Sex Reassignment
                                              Surgery, and Breast Augmentation Surgery ‘‘Treat’’
                                              GID
                                           1. Cross-Gender Hormones and Sex Reassignment Surgery
                                         Our conclusions that GID is a ‘‘disease’’ for purposes of sec-
                                      tion 213, and that petitioner suffered from it, leave the ques-
                                      tion of whether petitioner’s hormone therapy, sex reassign-
                                      ment surgery, and breast augmentation surgery ‘‘[treated]’’
                                      GID within the meaning of section 213(d)(1)(A) and (9)(B).
                                         In contrast to their dispute over the meaning of ‘‘disease’’,
                                      the parties have not disputed the meaning of ‘‘treatment’’ or
                                      ‘‘treat’’ as used in section 213(d)(1)(A) and (9)(B), respec-
                                      tively. We accordingly interpret the words in their ordi-
                                      nary, everyday sense. See Crane v. Commissioner, 331 U.S.
                                      1, 6 (1947); Old Colony R.R. Co. v. Commissioner, 284 U.S.
                                      552, 560 (1932) (‘‘ ‘The legislature must be presumed to use
                                      words in their known and ordinary signification’ ’’ (quoting
                                      Levy’s Lessee v. M’Cartee, 6 Pet. 102, 110 (1832))); see also
                                      Heard v. Commissioner, 269 F.2d 911, 912 (3d Cir. 1959)
                                      (‘‘The words of * * * [section 213] are to be given their
                                      normal meaning without striving to read exceptions into
                                      them.’’), revg. in part 30 T.C. 1093 (1958).
                                         ‘‘Treat’’ is defined in standard dictionaries as: ‘‘to deal with
                                      (a disease, patient, etc.) in order to relieve or cure’’, Webster’s
                                      New Universal Unabridged Dictionary 2015 (2003); ‘‘to care
                                      for or deal with medically or surgically’’, Merriam Webster’s
                                      suffering males (for other medical reasons), and those males experience impotence, widening
                                      hips, and breast development, their response is not a sense of well-being but anxiety.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00031   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                               65


                                      Collegiate Dictionary 1333 (11th ed. 2008); ‘‘5 a: to care for
                                      (as a patient or part of the body) medically or surgically: deal
                                      with by medical or surgical means: give a medical treatment
                                      to * * * b: to seek cure or relief of * * * ’’, Webster’s Third
                                      New International Dictionary 2435 (2002).
                                         The regulations provide that medical care is confined to
                                      expenses ‘‘incurred primarily for the prevention or alleviation
                                      of a physical or mental defect or illness’’. Sec. 1.213–
                                      1(e)(1)(ii), Income Tax Regs. (emphasis added). A treatment
                                      should bear a ‘‘direct or proximate therapeutic relation to the
                                      * * * condition’’ sufficient ‘‘to justify a reasonable belief the
                                      * * * [treatment] would be efficacious’’. Havey v. Commis-
                                      sioner, 12 T.C. 409, 412 (1949). In Starrett v. Commissioner,
                                      41 T.C. at 881, this Court concluded that the taxpayer’s
                                      psychoanalysis was a treatment of disease because the tax-
                                      payer was ‘‘thereby relieved of the physical and emotional
                                      suffering attendant upon’’ the condition known as anxiety
                                      reaction.
                                         Hormone therapy, sex reassignment surgery and, under
                                      certain conditions, breast augmentation surgery are pre-
                                      scribed therapeutic interventions, or treatments, for GID out-
                                      lined in the Benjamin standards of care. The Benjamin
                                      standards are widely accepted in the psychiatric profession,
                                      as evidenced by the recognition of the standards’ triadic
                                      therapy sequence as the appropriate treatment for GID and
                                      transsexualism in numerous psychiatric and medical ref-
                                      erence texts. 44 Indeed, every psychiatric reference text that
                                      has been established as authoritative in this case endorses
                                      sex reassignment surgery as a treatment for GID in appro-
                                      priate circumstances. 45 No psychiatric reference text has
                                         44 See ‘‘Gender Identity’’, Merck Manuals Second Home Edition, http://www.merck.com/mmhe/

                                      print/sec07/ch104/ch104b.html; ‘‘Gender Identity Disorder and Transsexualism’’, Merck Manuals
                                      Online Medical Library, supra; National Institutes of Health, U.S. National Library of Medicine,
                                      Medline Plus Medical Encyclopedia, supra; Senagore & Frey, ‘‘Orchiectomy’’, Gale Encyclopedia
                                      of Surgery (Thomson Gale 2003).
                                         45 The following psychiatric reference texts have been established as learned treatises, see

                                      Fed. R. Evid. 803(18), and endorse the essential elements of the triadic therapy sequence of the
                                      Benjamin standards, including sex reassignment surgery. American Psychiatric Association,
                                      Treatments of Psychiatric Disorders, ch. 70 (3d ed., American Psychiatric Press 2001):
                                      The [Benjamin] ‘‘Standards of Care’’ for treating gender-dysphoric individuals, developed by an
                                      international group of experts [citation omitted] and followed by most responsible professionals
                                      in the field, provides a valuable guide for evaluation and treatment.

                                                          *         *          *          *           *         *        *
                                                                                                          Continued




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00032   Fmt 3851       Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      66                 134 UNITED STATES TAX COURT REPORTS                                             (34)


                                      been brought to the Court’s attention that fails to list, or
                                      rejects, the triadic therapy sequence or sex reassignment sur-
                                      gery as the accepted treatment regimen for GID. 46 Several
                                      courts have accepted the Benjamin standards as representing
                                      Once a patient has met readiness criteria for referral as outlined in the [Benjamin] Standards
                                      of Care, she must decide on a surgical technique and surgeon. * * *
                                      Becker, et al., ch. 19, ‘‘Sexual and Gender Identity Disorders’’, in The American Psychiatric
                                      Press Textbook of Psychiatry (3d ed.):
                                      Sex reassignment is a long process that must be carefully monitored. * * * If the patient is con-
                                      sidered appropriate for sex reassignment, psychotherapy should be started to prepare the pa-
                                      tient for the cross-gender role. The patient should then go out into the world and live in the
                                      cross-gender role before surgical reassignment. * * * After 1–2 years, if these measures have
                                      been successful and the patient still wishes reassignment, hormone treatment is begun. * * *
                                      After 1–2 years of hormone therapy, the patient may be considered for surgical reassignment
                                      if such a procedure is still desired.
                                      Green, in New Oxford Textbook of Psychiatry, supra at 914–915:
                                      * * * The [Benjamin standards of care] programme includes, in addition to ongoing psychiatric
                                      or psychological monitoring, possibly endocrine therapy and, depending on the outcome of the
                                      graduated trial period of cross-gender living, possibly sex reassignment surgical procedures. The
                                      philosophy of treatment is to do reversible procedures before those that are irreversible.
                                      * * * If patients can demonstrate to themselves and mental health experts that they have suc-
                                      cessfully negotiated the ‘Real Life Test’ and are adjusting better socially in this new gender role,
                                      they can be referred for surgery.
                                      Sadock & Sadock, Kaplan & Sadock’s Comprehensive Textbook of Psychiatry 1659–1660 (7th
                                      ed., Lippincott Williams & Wilkins 2000):
                                      * * * When the patient’s gender dysphoria is severe and intractable, sex reassignment may be
                                      the best solution. The first medical intervention in this process is hormone therapy. * * *
                                      * * * The second major stage in the medical treatment of transsexualism is sex reassignment
                                      surgery. All major gender identity clinics in North America and western Europe require their
                                      patients to live full-time in the cross-gender role for some time—usually 1 to 2 years—prior to
                                      surgery.
                                      Tasman et al., Psychiatry 1491–1492 (2d ed., John Wiley & Sons 2003):
                                      The treatment of * * * [gender identity disorders], although not as well-based on scientific evi-
                                      dence as some psychiatric disorders, has been carefully scrutinized by multidisciplinary commit-
                                      tees of specialists with the Harry Benjamin International Gender Dysphoria Association
                                      [WPATH] for over 20 years. For more details in managing an individual patient, please consult
                                      its ‘‘Standards of Care’’ [citation omitted]. * * *
                                                          *         *          *          *           *         *        *
                                      Living in the aspired-to-gender role—working, relating, conducting the activities of daily living—
                                      is a vital process that enables one of three decisions: to abandon the quest, to simply live in
                                      this new role, or to proceed with breast or genital surgery [citation omitted]. * * *
                                      Ideally, hormones should be administered by endocrinologists who have a working relationship
                                      with a mental health team dealing with gender problems. * * *
                                                          *         *          *          *           *         *        *
                                      Surgical intervention is the final external step.
                                         46 Respondent offered into evidence a chapter from a psychiatric reference text that respond-

                                      ent claimed did not reference the Benjamin standards of care; namely, Becker, et al., supra.
                                      However, a review of the chapter cited (particularly pp. 743–744) reveals that the Benjamin
                                      triadic sequence—cross-gender hormone therapy, living in the cross-gender role, and sex reas-
                                      signment surgery—is discussed (without naming the Benjamin standards or WPATH specifi-
                                      cally) and endorsed as the appropriate treatment protocol, as set out supra note 45.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00033   Fmt 3851       Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           67


                                      the consensus of the medical profession regarding the appro-
                                      priate treatment for GID or transsexualism. See Gammett v.
                                      Idaho State Bd. of Corr., No. CV05–257–S–MHW (D. Idaho,
                                      July 27, 2007) (memorandum decision and order); Houston v.
                                      Trella, No. 2:04–CV–01393 (D.N.J., Sept. 25, 2006) (opinion);
                                      Kosilek v. Maloney, 221 F. Supp. 2d 156, 158 (D. Mass. 2002);
                                      Farmer v. Hawk-Sawyer, 69 F. Supp. 2d 120, 121 n.3 (D.D.C.
                                      1999).
                                         Nonetheless, respondent’s expert Dr. Schmidt contends in
                                      his report that ‘‘physician acceptance of the * * * [Benjamin
                                      standards] is limited’’ and that the standards are guidelines
                                      and are only ‘‘accepted as more than guidelines by profes-
                                      sionals who advocate for hormonal and surgical treatment of
                                      Gender Identity Disorder’’. However, Dr. Schmidt conceded
                                      on cross-examination his prior sworn statement to the effect
                                      that he agreed with the Benjamin standards (except that
                                      psychotherapy should be mandatory rather than rec-
                                      ommended) and was unaware of any significant disagreement
                                      with the Benjamin standards in the psychiatric field, other
                                      than those who believe that sex reassignment surgery is
                                      unethical, 47 a position that Dr. Schmidt characterized as a
                                      minority one. Dr. Schmidt also acknowledged that all GID
                                      patients at the sexual disorders clinic at Johns Hopkins
                                      where he practices are advised to become familiar with the
                                      Benjamin standards of care, and he concedes that cross-
                                      gender hormone therapy and sex reassignment surgery ‘‘have
                                      recognized medical and psychiatric benefits’’ for persons suf-
                                      fering from GID. 48 Dr. Schmidt also observed in his report
                                      that most physicians—indeed, most psychiatrists—know very
                                      little about GID or its treatment and shun GID patients, which
                                      may explain why the acceptance of the Benjamin standards
                                      is not broad based in American medicine. In any event, given
                                      his own acceptance of the standards and their use in his
                                        47 Dr. Schmidt cited an article by Dr. Paul McHugh as evidence of the view of sex reassign-

                                      ment surgery as unethical and not medically necessary. On cross-examination, Dr. Schmidt ac-
                                      knowledged that the McHugh article was not published in a peer-reviewed medical journal but
                                      instead in a religious publication. See McHugh, ‘‘Surgical Sex’’, First Things, The Institute on
                                      Religion and Public Life (November 2004), http://www.firstthings.com/index.php (online edition).
                                      Respondent likewise cites the McHugh article on brief as medical opinion, without disclosing the
                                      source of its publication.
                                        48 Dr. Schmidt also acknowledged previously stating that a surgically created vagina in a bio-

                                      logical male with GID ‘‘creates an internal sense of consistency that is very important in main-
                                      taining a balance on a day-to-day basis and not having to bounce back and forth between, you
                                      know, am I male or am I female.’’




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00034   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      68                    134 UNITED STATES TAX COURT REPORTS                                        (34)


                                      clinic, to the extent Dr. Schmidt is suggesting that the stand-
                                      ards have limited acceptance among professionals knowledge-
                                      able regarding GID, he is unpersuasive. The widespread rec-
                                      ognition of the Benjamin standards in the medical literature
                                      in evidence strongly supports the conclusion that the stand-
                                      ards enjoy substantial acceptance.
                                         Moreover, petitioner’s expert Dr. Brown contends that in
                                      the case of severe GID, sex reassignment surgery is the only
                                      known effective treatment; indeed, Dr. Brown was unaware
                                      of any case where psychotherapy alone had been effective in
                                      treating severe GID. The U.S. Court of Appeals for the Sev-
                                      enth Circuit and the highest courts of two States have
                                      reached similar conclusions. See Maggert v. Hanks, 131 F.3d
                                      at 671; Sommers v. Iowa Civil Rights Commn., 337 N.W.2d
                                      470, 473 (Iowa 1983); Doe v. Minn. Dept. of Pub. Welfare, 257
                                      N.W.2d 816, 819 (Minn. 1977). 49
                                         Respondent also argues that petitioner’s sex reassignment
                                      surgery did not ‘‘treat’’ disease within the meaning of section
                                      213(d)(9)(B) because there is insufficient scientific evidence of
                                      the surgery’s efficacy in treating GID. Petitioner’s and
                                      respondent’s experts disagree regarding the sufficiency of the
                                      scientific proof of the surgery’s efficacy. Respondent’s expert
                                      Dr. Schmidt contends that efficacy (beyond patient satisfac-
                                      tion) has not been demonstrated, whereas petitioner’s expert
                                      Dr. Brown believes there is ample proof of positive thera-
                                      peutic outcomes.
                                         Psychiatric reference texts support Dr. Brown’s position.
                                      See Green, ‘‘Gender Identity Disorder in Adults’’, in New
                                      Oxford Textbook of Psychiatry 915 (Gelder, et al., eds.,
                                      Oxford Univ. Press 2000) (stating ‘‘Follow-up reports on oper-
                                      ated transsexuals are generally quite favorable’’ and
                                      describing a study where transsexual patients were randomly
                                           49 Judge   Posner wrote in Maggert v. Hanks, 131 F.3d at 671:
                                      The cure for the male transsexual consists not of psychiatric treatment designed to make the
                                      patient content with his biological sexual identity—that doesn’t work—but of estrogen therapy
                                      designed to create the secondary sexual characteristics of a woman followed by the surgical re-
                                      moval 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]. * * *




VerDate 0ct 09 2002   13:27 May 23, 2013    Jkt 372897    PO 20009   Frm 00035   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           69


                                      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 improve-
                                      ment 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 & Wil-
                                      kins 2000) (‘‘Outcome studies as a whole suggest that sur-
                                      gical 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 improve-
                                      ments in the lives of patients [citation omitted]—more social
                                      activities with friends and family, more activity in sports,
                                      more partner sexual activity, and improved vocational
                                      status’’).
                                         However, even assuming some debate remains in the med-
                                      ical profession regarding acceptance of the Benjamin stand-
                                      ards or the scientific proof of the therapeutic efficacy of sex
                                      reassignment surgery, a complete consensus on the advis-
                                      ability or efficacy of a procedure is not necessary for a deduc-
                                      tion 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 the 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-




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00036   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      70                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      gender hormone therapy and sex reassignment surgery
                                      unethical because 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 considered unethical by some. See,
                                      e.g., Rev. Rul. 73–201, 1973–1 C.B. 140 (cost of abortion legal
                                      under State law is deductible medical 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 hor-
                                      mone therapy and sex reassignment surgery are well-recog-
                                      nized and accepted treatments for severe GID. The evidence
                                      demonstrates that hormone therapy and sex reassignment
                                      surgery to alter appearance (and, to some degree, function 50)
                                      are undertaken by GID sufferers in an effort to alleviate the
                                      distress and suffering occasioned by GID, and that the proce-
                                      dures 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 regu-
                                      latory and caselaw 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 213(d)(9)(B) and
                                      accordingly are not ‘‘cosmetic surgery’’ as defined in that sec-
                                      tion.
                                         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 dis-
                                      ease also finds support in the opinions of other courts that
                                      have concluded for various nontax purposes that sex
                                        50 The undisputed evidence is that administration of feminizing hormones to genetic male GID

                                      sufferers produces a psychological calming effect in addition to physical changes. Sex reassign-
                                      ment surgery in genetic males uses penile tissue in the newly created vagina in a manner de-
                                      signed to make the patient capable of arousal and intercourse.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00037   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           71


                                      reassignment surgery and/or hormone therapy are not cos-
                                      metic 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’ nec-
                                      essary 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. 1980) (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 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 cos-
                                      metic.’’); 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 reassign-
                                      ment 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 des-
                                      ignated sex reassignment surgery as ‘‘cosmetic surgery’’ and
                                      alternate GID treatments available).




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00038   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      72                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                           2. Breast Augmentation Surgery
                                          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 peti-
                                      tioner’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 promote the proper
                                      function of the body or prevent or treat illness or disease’’,
                                      placing the surgery squarely within the 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 pursu-
                                      ant 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 sur-
                                      geon have documented that breast enlargement after under-
                                      going hormone treatment for 18 months is not sufficient for
                                      comfort in the social gender role.’’ The record contains no
                                      documentation from the endocrinologist prescribing peti-
                                      tioner’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
                                      ‘‘approximately B cup breasts with a very nice shape.’’ 51
                                      Thus, all of the contemporaneous documentation of the condi-
                                       51 Even petitioner conceded in her testimony that she had ‘‘a fair amount of breast develop-

                                      ment * * * from the hormones’’ at the time of her presurgical consultation with Dr. Meltzer.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00039   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           73


                                      tion 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 ref-
                                      erence 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 contem-
                                      poraneous documentation of the breasts’ apparent normalcy
                                      and the failure to adhere to the Benjamin standards’ require-
                                      ment to document breast-engendered anxiety to justify the
                                      surgery, we find that petitioner’s breast augmentation sur-
                                      gery did not fall within the treatment protocols of the Ben-
                                      jamin 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 aug-
                                      mentation ‘‘did not promote the proper function of her
                                      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 aug-
                                      mentation surgery ‘‘meaningfully [promoted] the proper func-
                                      tion 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 femi-

                                      nize 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.
                                                                                                   Continued




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00040   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      74                 134 UNITED STATES TAX COURT REPORTS                                             (34)


                                           E. Medical Necessity
                                         Finally, respondent argues that petitioner’s sex reassign-
                                      ment surgery was not ‘‘medically necessary’’, 53 which
                                      respondent contends is a requirement intended by Congress
                                      to 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 of non-
                                      deductible cosmetic surgery with ‘‘medically necessary’’ proce-
                                      dures evidences an intent by Congress to impose a require-
                                      ment in section 213(d)(9) of medical necessity for the deduc-
                                      tion of procedures affecting appearance. We find it unneces-
                                      sary to resolve respondent’s claim that section 213(d)(9)
                                      should be interpreted to require a showing of ‘‘medical neces-
                                      sity’’ 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
                                      reassignment surgery was medically necessary.
                                         Respondent’s basis for the claim that petitioner’s sex
                                      reassignment surgery was not medically necessary is the
                                      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 con-
                                      clude that the facial surgery does not suggest, as respondent contends, that petitioner had a
                                      propensity for conventional cosmetic surgery.
                                         53 Respondent 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 sur-
                                      gery.’’
                                         54 Respondent relies upon the following excerpts from the report of the Senate Finance Com-

                                      mittee 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, vol-
                                      untary personal expenses, which like other personal expenditures (e.g., food and clothing) gen-
                                      erally 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.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00041   Fmt 3851       Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           75


                                      expert report and testimony of his expert, Dr. Schmidt. Dr.
                                      Schmidt acknowledges in his report that the definition of
                                      medical necessity ‘‘varies according to the defining party’’.
                                      Dr. Schmidt never expressly defines the term, but he con-
                                      cludes that sex reassignment surgery is not medically nec-
                                      essary 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 thera-
                                      pist should remain neutral regarding the decision to have the
                                      surgery—which makes the surgery, Dr. Schmidt reasons,
                                      elective. 55 Taken 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 sur-
                                      gery has ‘‘recognized medical and psychiatric benefits’’ and is
                                      ‘‘certainly medically helpful’’.
                                         Dr. Schmidt conceded in his report that a significant seg-
                                      ment of those physicians who are knowledgeable concerning
                                      GID believes that sex reassignment surgery is medically nec-
                                      essary, ranging from those who believe such surgery is gen-
                                      erally medically necessary in treating GID to those who think
                                      it is medically necessary in selected cases. As noted, peti-
                                      tioner’s expert Dr. Brown believes that sex reassignment sur-
                                      gery 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; Sommers v. Iowa Civil Rights Commn., 337
                                      N.W.2d at 473; Doe v. Minn. Dept. of Pub. Welfare,
                                         55 Petitioner’s expert Dr. Brown disagrees with the view that a therapist should remain neu-

                                      tral regarding the decision to undergo sex reassignment surgery, believing that a patient experi-
                                      encing the distress of GID is not well equipped to make a 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.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00042   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      76                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      257 N.W.2d at 819; Davidson v. Aetna Life & Cas. Ins. Co.,
                                      420 N.Y.S.2d at 453.
                                         The mental health professional who treated petitioner con-
                                      cluded that petitioner’s GID was severe, that sex reassign-
                                      ment 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 peti-
                                      tioner, the agreement of all three experts that untreated GID
                                      can result in self-mutilation 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 nec-
                                      essary.
                                      IV. Conclusion
                                         The evidence amply supports the conclusions that peti-
                                      tioner 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 con-
                                      cerning the condition. Given our holdings that GID is a ‘‘dis-
                                      ease’’ and that petitioner’s 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 ele-
                                      ments 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
                                        56 When 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. Accord-
                                      ingly, there is a reasonable basis to conclude that Dr. Brown’s views are more widely recognized
                                      and accepted in the psychiatric profession.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00043   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           77


                                      who change their gender role and 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 under-
                                      gone 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.
                                         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 ‘‘med-
                                      ical 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 entered under Rule 155.
                                       Reviewed by the Court.
                                       COLVIN, COHEN, THORNTON, MARVEL, WHERRY, PARIS, and
                                      MORRISON, JJ., agree with this majority opinion.



                                        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 Surgery
                                         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. 73. For me, that
                                      petitioner failed to prove her doctors adhered to the Ben-
                                      jamin 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. 73, I find




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00044   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      78                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      superfluous and potentially misleading. In particular, the
                                      observation of Dr. Meltzer, petitioner’s surgeon, in his pre-
                                      surgical 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 compari-
                                      son 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
                                      petitioner’s appearance but ‘‘to assign her to the appropriate
                                      gender’’. His medical notes should not be taken out of con-
                                      text.
                                      II. Statutory Interpretation
                                           A. Introduction
                                        We face a task that is not unusual for us, that is, inter-
                                      preting the Internal Revenue Code, and we employ a set of
                                      tools (canons of construction and the like) that are familiar
                                      to both us and the parties. My colleagues raise arguments in
                                      support of respondent that he did not make. 1 Because they
                                      are not addressed by the majority, I use this opportunity to
                                      address some of them.
                                           B. Sex Reassignment Surgery, Treatment, and Mitigation
                                        For the sake of argument, 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 mis-
                                      understanding of that disease.
                                        For Judge Gustafson, petitioner’s disease was the ‘‘delu-
                                      sion’’ that she was a female. 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. Yet the
                                      record suggests that the disease is more than that. A
                                        1 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 re-
                                      spondent made all the arguments that he thought persuasive.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00045   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                     O’DONNABHAIN v. COMMISSIONER                                           79


                                      biological male who is 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 elimi-
                                      nating a sufficient number of those symptoms so that a diag-
                                      nosis of GID will no longer hold. And if the diagnosis will no
                                      longer hold, then the patient is cured.
                                         Petitioner’s expert, George R. Brown, M.D., was of the
                                      opinion that sex reassignment surgery does not change the
                                      patient’s belief that his or her psychological gender does not
                                      match his or her biological sex. Nevertheless, he was of the
                                      opinion that, by virtue of petitioner’s hormone therapy and
                                      sex reassignment surgery, she was cured of her GID, ‘‘which
                                      due to the severity and long-standing nature of her condition,
                                      would not have been possible without hormones and sex
                                      reassignment surgery.’’ He testified that, by ‘‘cured’’, he
                                      meant that the symptoms of the disorder were no longer
                                      present for an extended period. She was cured, he testified,
                                      because, when he examined her in March 2007 to prepare his
                                      expert testimony, she no longer met the criteria for a diag-
                                      nosis of GID. For instance, he testified, she had been free for
                                      a long time of clinically significant distress or impairment
                                      resulting from a misalignment of her body and her psycho-
                                      logical sex. Indeed, his explanation comports with a consider-
                                      ation of the diagnostic criteria in DSM–IV–TR (cited by the
                                      majority, majority op. p. 36) for GID. In discussing the diag-
                                      nostic features of GID, DSM–IV–TR states: ‘‘To make the diag-
                                      nosis [of GID], there must be evidence of clinically significant
                                      distress or impairment in social, occupational, or other
                                      important areas of functioning.’’
                                         Dr. Brown seems to have concluded that petitioner was
                                      cured according to the notion discussed above that a disease
                                      is characterized by an identifiable group of signs or symp-
                                      toms, 3 and when those signs or symptoms, once present, are
                                           2 See
                                             discussion of that precondition in the immediately following paragraph.
                                           3 The
                                             principal meaning of ‘‘disease’’ in the American Heritage Dictionary of the English Lan-
                                      guage 517 (4th ed. 2000) is: ‘‘A pathological condition of a part, organ, or system of an organism
                                                                                                     Continued




VerDate 0ct 09 2002   13:27 May 23, 2013    Jkt 372897   PO 20009   Frm 00046   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      80                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      no longer present in sufficient degree or severity to charac-
                                      terize (diagnose) the disease, the patient is free of the dis-
                                      ease; i.e., she is ‘‘cured’’. Whether in fact petitioner was free
                                      of clinically significant distress or impairment (there may
                                      have been some disagreement among the doctors) 4 has no
                                      effect on the force of Dr. Brown’s argument. If petitioner
                                      could be cured, then she could be treated, 5 and, as the
                                      majority makes clear, we do not ground decisions as to med-
                                      ical care on the efficacy of the treatment. Majority op. pp.
                                      69–70. Judge Gustafson has failed to convince me that we
                                      should understand the verb ‘‘to cure’’ in any but the way Dr.
                                      Brown uses it.
                                           C. The Intent of Congress
                                        Judge Goeke rejects surgery as a treatment for GID because
                                      of his contextual reading of the statute: ‘‘I believe that the
                                      word ‘treat’ in the context of the cosmetic surgery exclusion
                                      implies that for expenses for any procedure to be deductible,
                                      the procedure must address a physically related malady.’’
                                      Goeke op. p. 102. Judge Goeke, like Judge Gustafson, how-
                                      ever, fails to provide any convincing support for his position.
                                        Judge Goeke’s contextual argument relies heavily on his
                                      discerning congressional purpose from the report of the
                                      Senate Finance Committee discussed by the majority,
                                      majority op. note 27, and quoted by Judge Goeke, Goeke op.
                                      p. 103. In the light of the report language that he quotes,
                                      Judge Goeke argues: ‘‘The * * * Senate Finance Committee
                                      report indicates that Congress intended to allow deductions
                                      only for cosmetic surgery to correct physical maladies
                                      resulting from disease or physical disfigurement’’. Goeke op.
                                      p. 103. I disagree in general with Judge Goeke’s reliance on
                                      the report given the unambiguous language of section
                                      213(d)(9), and I disagree in particular with the inference he
                                      draws from the report.
                                      resulting from various causes, such as infection, genetic defect, or environmental stress, and
                                      characterized by an identifiable group of signs or symptoms.’’ (Emphasis added.)
                                        4 In rebuttal to Dr. Brown, respondent’s expert, Chester W. Schmidt, Jr., M.D., disagreed with

                                      Dr. Brown’s use of the word ‘‘cure’’ in connection with petitioner, since she continued to suffer
                                      from psychiatric disorders, but he did not dispute that someone who presents no symptoms of
                                      a disease would be considered cured of that disease.
                                        5 Judge Gustafson seems to concede that if GID is curable, then it is treatable: ‘‘[A]ny proce-

                                      dure that does ‘cure’ a disease necessarily ‘treats’ it.’’ Gustafson op. note 7.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00047   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                            81


                                        In Campbell v. Commissioner, 108 T.C. 54, 62–63 (1997),
                                      we set forth the well-established and well-understood rules
                                      for construing a provision of the Internal Revenue Code:
                                         In construing * * * [a provision of the Internal Revenue Code], our task
                                      is to give effect to the intent of Congress, and we must begin with the
                                      statutory language, which is the most persuasive evidence of the statutory
                                      purpose. United States v. American Trucking Associations, Inc., 310 U.S.
                                      534, 542–543 (1940). Ordinarily, the plain meaning of the statutory lan-
                                      guage is conclusive. United States v. Ron Pair Enters. Inc., 489 U.S. 235,
                                      242 (1989). Where a statute is silent or ambiguous, we may look to legisla-
                                      tive history in an effort to ascertain congressional intent. Burlington N.
                                      R.R. v. Oklahoma Tax Commn., 481 U.S. 454, 461 (1987); Griswold v
                                      United States, 59 F.3d 1571, 1575–1576 (11th Cir. 1995). However, where
                                      a statute appears to be clear on its face, we require unequivocal evidence
                                      of legislative purpose before construing the statute so as to override the
                                      plain meaning of the words used therein. Huntsberry v. Commissioner, 83
                                      T.C. 742, 747–748 (1984); see Pallottini v. Commissioner, 90 T.C. 498, 503
                                      (1988), and cases there cited.

                                         The word ‘‘treat’’ is found in section 213(d)(9) only in the
                                      definition of ‘‘cosmetic surgery’’ in section 213(d)(9)(B). 6 It
                                      forms part of the expression ‘‘does not * * * prevent or treat
                                      illness or disease’’, and nothing in the definition indicates
                                      that the expression excludes surgical treatments for mental
                                      illness or mental disease. The language of section
                                      213(d)(9)(B) is sufficiently plain that, in searching the legis-
                                      lative history of the provision for a contradiction, I would
                                      keep firmly in mind the Supreme Court’s injunction in
                                      United States v. Ron Pair Enters., Inc., 489 U.S. 235, 242
                                      (1989): Ordinarily, the plain meaning of the statutory lan-
                                      guage is conclusive.
                                         I would also keep in mind that, as quoted above, ‘‘where
                                      a statute appears to be clear on its face, we require
                                      unequivocal evidence of legislative purpose before construing
                                      the statute so as to override the plain meaning of the words
                                         6 That provision, on its face, is ambiguous only to the extent that, to give meaning to the term

                                      ‘‘other similar procedures’’ in sec. 213(d)(9)(A), the word ‘‘surgical’’ probably should be inferred
                                      before the word ‘‘procedure’’. Sec. 213(d)(9)(B) would then read: ‘‘Cosmetic surgery defined.—For
                                      purposes of this paragraph, the term ‘cosmetic surgery’ means any [surgical] 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.’’
                                         Without the inferred ‘‘surgical’’, the set of procedures constituting ‘‘cosmetic surgery’’ would
                                      seem to encompass every procedure (surgical or not) doing nothing other than improving the
                                      patient’s appearance, apparently leaving ‘‘other similar procedures’’ an empty set (empty be-
                                      cause all procedures directed at improving appearance would already be in the set labeled ‘‘cos-
                                      metic surgery’’).




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00048   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      82                 134 UNITED STATES TAX COURT REPORTS                                            (34)


                                      used therein.’’ Campbell v. Commissioner, supra at 63. Here
                                      there is no such evidence. The paragraph of the Senate
                                      Finance Committee report on which Judge Goeke relies does
                                      not adequately illuminate subparagraph (B) of section
                                      213(d)(9) because it discusses ‘‘disease’’ only in the context of
                                      the amelioration of a ‘‘disfiguring disease’’ in subparagraph
                                      (A) of that section. 7 The report does not even mention that,
                                      according to the definition of cosmetic surgery, a procedure
                                      that prevents or treats illness or disease will not be classified
                                      as cosmetic surgery under section 213(d)(9)(B). The Senate
                                      Finance Committee report is far from unequivocal evidence
                                      of legislative purpose contrary to that to be inferred from the
                                      plain language of section 213(d)(9)(B). 8 I would stick with
                                      the plain language and read ‘‘treat’’ and ‘‘illness or disease’’
                                      to have their ordinary meanings.
                                           D. The Plain Language of the Provision
                                        Judge Foley takes both the majority and respondent to
                                      task for not adhering to the plain language of section
                                      213(d)(9). The plain language, he argues, compels the conclu-
                                      sion that for surgery directed at improving appearance to
                                      escape classification as cosmetic surgery under section
                                      213(d)(9)(B) it must both meaningfully promote the proper
                                      function of the body and prevent or treat illness or disease. 9
                                        7 The reference to ‘‘disfiguring disease’’ in subpar. (A) of sec. 213(d)(9) is also clear on its face.

                                      That term is the object of the verb ‘‘to ameliorate’’, which is different from the verb ‘‘to treat’’.
                                      To treat a disease is to seek to cure it; to ameliorate a disfiguring disease is seek to reduce
                                      the effects of a disease now gone. For example, consider dermal abrasion to erase scars left by
                                      a severe case of adolescent acne.
                                        8 Indeed, H. Conf. Rept. 101–964, at 1032 (1990), 1991–2 C.B. 560, 562, which accompanied

                                      the Omnibus Budget Reconciliation Act of 1990, Pub. L. 101–508, sec. 11342(a), 104 Stat. 1388–
                                      471 (adding sec. 213(d)(9)), and which postdates the Senate Finance Committee report, describes
                                      the Senate amendment adding sec. 213(d)(9) in the exact terms of the statute:
                                        The Senate Amendment provides that expenses paid for cosmetic surgery or other similar pro-
                                      cedures are not deductible medical expenses, unless the surgery or procedure is necessary to
                                      ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal
                                      injury resulting from an accident or trauma, or disfiguring disease. For purposes of this provi-
                                      sion, cosmetic surgery is defined as 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.
                                      N.b.: The term ‘‘disease’’ is used twice, in two different contexts, and, as the majority notes, ma-
                                      jority op. note 54, there is no reference to ‘‘medical necessity’’.
                                        9 Judge Foley does not put it that way (i.e., stating what cosmetic surgery is not), but that

                                      must be what he means, because he writes: ‘‘Thus, if petitioner’s procedures are ‘directed at im-
                                      proving * * * appearance’ and ‘[do] not meaningfully promote the proper function of the body’,
                                      they are cosmetic surgery without regard to whether they treat a disease.’’ Foley op. p. 105. I
                                      assume he would concede that a procedure directed at improving appearance that both meaning-




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00049   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134      SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           83


                                      He further argues that, even if not cosmetic surgery within
                                      the meaning of section 213(d)(9)(B), petitioner’s sex reassign-
                                      ment surgery and related procedures (I assume the hormone
                                      therapy) may be ‘‘other similar procedures’’ under section
                                      213(d)(9)(A). I believe that Judge Foley is wrong on his first
                                      count and that, with respect to his second count, neither the
                                      sex reassignment surgery nor the hormone therapy falls
                                      within the class of ‘‘other similar procedures’’.
                                        I agree with Judge Foley that section 213(d)(9)(B) sets
                                      forth a two-part test: A procedure is cosmetic surgery if it (1)
                                      is directed at improving appearance and (2) does not mean-
                                      ingfully promote the proper function of the body or prevent
                                      or treat illness or disease. Because the second part of the test
                                      contains two expressions separated by ‘‘or’’, that part of the
                                      test contains a ‘‘disjunction’’; i.e., a compound proposition
                                      that is true if one of its elements is true. Importantly, how-
                                      ever, the second part of the test contains not just a
                                      disjunction (i.e., (p or q)), but rather the negation of a
                                      disjunction (i.e., not (p or q)). Judge Foley errs because he
                                      assumes that the expression ‘‘not (p or q)’’ is equivalent to
                                      the expression ‘‘(not p) or (not q)’’. Thus, he redefines cos-
                                      metic surgery such that: ‘‘A procedure ‘directed at improving
                                      the patient’s appearance’ is cosmetic surgery if it either does
                                      not ‘meaningfully promote the proper function of the body’ or
                                      does not ‘prevent or treat illness or disease.’ ’’ Foley p. 105.
                                      Judge Foley simply disregards the rules of grammar and
                                      logic in favor of a part of the legislative history that is silent
                                      as to the interpretative question he fashions.
                                        In formal logic, there is a set of rules, De Morgan’s laws,
                                      relating the logical operators ‘‘and’’ and ‘‘or’’ in terms of each
                                      other via negation. E.g., http://en.wikipedia.org/wiki/
                                      DelMorgan’sllaws. The rules are:
                                                                   not (p or q) = (not p) and (not q)
                                                                   not (p and q) = (not p) or (not q)

                                      The first of the rules would appear to govern the disjunction
                                      in section 213(d)(9)(B), which is of the form ‘‘not (p or q)’’. Its
                                      equivalent is of the form ‘‘(not p) and (not q)’’, which, sub-
                                      stituting the relevant words, is: ‘‘does not meaningfully pro-
                                      mote the proper function of the body and does not prevent or
                                      fully promotes function and treats a disease is not cosmetic surgery.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00050   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      84                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      treat illness or disease’’. The two-part test of section
                                      213(d)(9)(B) for determining whether a procedure is cosmetic
                                      surgery could then equivalently be rewritten: A procedure is
                                      cosmetic surgery if it (1) is directed at improving appearance
                                      and (2) does not meaningfully promote the proper function of
                                      the body and does not prevent or treat illness or disease. The
                                      second expression is true only if the procedure neither mean-
                                      ingfully promotes the proper function of the body nor pre-
                                      vents or treats illness or disease. If one of the alternatives
                                      is true, however, then the expression is false and the test is
                                      flunked, so that the procedure is not cosmetic surgery. That,
                                      of course, contradicts Judge Foley’s reading of the statute,
                                      but I believe the better view is to presume that Congress is
                                      careful in its drafting and drafts in accordance, rather than
                                      in conflict, with the rules of grammar and logic.
                                         Finally, Judge Foley argues that the ‘‘similar procedures’’
                                      referred to in section 213(d)(9)(A) are delimited only by the
                                      exceptions found in that provision and not the exceptions to
                                      the definition of cosmetic surgery found in section
                                      213(d)(9)(B). 10 That reading seems wrong: Does Judge Foley
                                      suggest that even ‘‘similar procedures’’ that ‘‘meaningfully
                                      promote the proper function of the body’’ and ‘‘prevent or
                                      treat illness or disease’’ are not deductible ‘‘medical care’’?
                                      That cannot be correct. As I noted earlier, if we infer the
                                      word ‘‘surgical’’ before the word ‘‘procedure’’ in the section
                                      213(d)(9)(B) definition of cosmetic surgery, then the term
                                      ‘‘other similar procedures’’ in section 213(d)(9)(A) is given
                                      meaning. I would argue that ‘‘other similar procedures’’
                                      refers to nonsurgical, appearance-enhancing procedures, such
                                      as hormone therapy, the deductibility of which is tested by
                                      applying first the exceptions in section 213(d)(9)(B), then
                                      those in section 213(d)(9)(A). Petitioner’s sex reassignment
                                      surgery is excluded from the class of ‘‘other similar proce-
                                      dures’’ principally because it is surgical. Her hormone
                                      therapy is excluded because, as the majority finds, it treats
                                      her disease.


                                        10 I assume that Judge Foley would concede that ‘‘other similar procedures’’, like cosmetic sur-

                                      gery, must be directed at improving appearance. If not, it is difficult to imagine what boundaries
                                      Congress had in mind for other ‘‘similar’’ procedures.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00051   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                         O’DONNABHAIN v. COMMISSIONER                                          85


                                            E. Medical Necessity
                                        Without deciding whether section 213(d)(9) requires a
                                      showing of medical necessity, the majority nonetheless finds
                                      that petitioner’s sex reassignment surgery was medically nec-
                                      essary. Majority op. p. 74. Apparently, the majority is pre-
                                      paring for a perhaps different view of the statute by the
                                      Court of Appeals. Judge Holmes’ Brandeis brief 11 exhibits
                                      impressive scholarship, discussing much that is outside the
                                      record. We are a trial court, however, principally restricted
                                      to evidence presented, and arguments made, by the parties.
                                      See Snyder v. Commissioner, 93 T.C. 529, 531–535 (1989).
                                      On the record before us, and as argued by respondent, the
                                      majority’s finding is not clearly erroneous.



                                        HOLMES, J., concurring: On this record, for this taxpayer,
                                      and on the facts found by the Judge who heard this case, I
                                      agree with the majority’s conclusion—that O’Donnabhain can
                                      deduct the cost of her hormone therapy and sex-reassign-
                                      ment surgery, but not her breast-augmentation surgery. I
                                      also agree with the majority that GID is a mental disorder,
                                      and therefore a disease under section 213. But I disagree
                                      with the majority’s extensive analysis concluding that sex
                                      reassignment is the proper treatment—indeed, medically nec-
                                      essary at least in ‘‘severe’’ cases—for GID. It is not essential
                                      to the holding and drafts our Court into culture wars in
                                      which tax lawyers have heretofore claimed noncombatant
                                      status.




                                           11 A   Brandeis brief is:
                                      A brief, [usually] an appellate brief, that makes use of social and economic studies in addition
                                      to legal principles and citations. * * * The brief is named after Supreme Court Justice Louis
                                      D. Brandeis, who as an advocate filed the most famous such brief in Muller v. Oregon, 208 U.S.
                                      412 * * * (1908), in which he persuaded the Court to uphold a statute setting a maximum ten-
                                      hour workday for women.
                                      Black’s Law Dictionary 213 (9th ed. 2009); see Snyder v. Commissioner, 93 T.C. 529, 533–534
                                      (1989).




VerDate 0ct 09 2002   13:27 May 23, 2013    Jkt 372897     PO 20009    Frm 00052   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      86                    134 UNITED STATES TAX COURT REPORTS                                         (34)


                                                                                            I.


                                                                                            A.

                                         What does it mean for a person born male to testify, as did
                                      O’Donnabhain, that ‘‘I was a female. The only way for me
                                      to—the only way for me to be the real person that I was in
                                      my mind was to have this surgery’’?
                                         This is not like saying ‘‘Lab tests show Vibrio cholerae, and
                                      therefore I have cholera’’, or ‘‘the X-ray shows a tumor in the
                                      lung and therefore I have lung cancer’’, or even ‘‘the patient
                                      reports that he is Napoleon and is being chased by the
                                      English’’, and therefore has schizophrenia.
                                         In the crash course on transsexualism that this case has
                                      forced on us, there are at least four approaches that those
                                      who’ve studied the phenomenon of such feelings have had.
                                      One response, curtly dismissed by the majority, is that this
                                      is a form of delusion:
                                         It is not obvious how this patient’s feeling that he is a woman trapped
                                      in a man’s body differs from the feeling of a patient with anorexia nervosa
                                      that she is obese despite her emaciated, cachectic state. We don’t do
                                      liposuction on anorexics. Why amputate the genitals of these poor men?
                                      Surely, the fault is in the mind and not the member.

                                      McHugh, ‘‘Psychiatric Misadventures’’, Am. Scholar 497, 503
                                      (1992). For such psychiatrists, gender follows sex, is a funda-
                                      mental part of human nature, and is not easily amenable to
                                      change. Those who take this view look at transsexual per-
                                      sons to uncover what they suspect are comorbidities—other
                                      things wrong with their patients that might explain the
                                      undoubtedly powerful feeling that they are wrongly sexed
                                      and whose treatment might alleviate the stress that it causes
                                      them.
                                         A second approach focuses on the notion of ‘‘feeling
                                      female.’’ What does this mean? The answer adopted by the
                                      majority and urged by O’Donnabhain is that this is a short-
                                      hand way of saying that a transsexual person’s gender (i.e.,
                                      characteristic way of feeling or behaving, and conventionally
                                      labeled either masculine or feminine) is strongly perceived by
                                      her as mismatched to her sex (i.e., biological characteris-
                                      tics). 1 This, too, is highly contested territory—gender being
                                           1 For   a longer discussion on the definitions of gender versus sex, see Meyer, ‘‘The Theory of




VerDate 0ct 09 2002   13:27 May 23, 2013    Jkt 372897    PO 20009   Frm 00053   Fmt 3851    Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           87


                                      thought by many, particularly feminists, to be entirely some-
                                      thing society imposes on individuals. To such theorists,
                                      transsexualism is likewise a social construct:
                                        The medical profession need not direct the gender dissatisfied to sur-
                                      gery. Counselling is possible to encourage clients to take a more political
                                      approach to their situation and to realize that they can rebel against the
                                      constraints of a prescribed gender role, and relate to their own sex in their
                                      native bodies.

                                      Jeffreys, ‘‘Transgender Activism: A Lesbian Feminist
                                      Perspective,’’ 1 J. Lesbian Stud. 55, 70 (1997) (suggesting SRS
                                      be proscribed as ‘‘crime against humanity’’); see also id. at 56
                                      (citing Raymond, The Transsexual Empire (Teachers College
                                      Press 1994)).
                                         Yet a third school of thought is that the origins of at least
                                      many (but not all) transsexual feelings—particularly those
                                      with extensive histories of secret transvestism—is that it’s
                                      not about gender, but about a particular kind of erotic
                                      attachment. See, e.g., Blanchard, ‘‘Typology of Male-to-
                                      Female Transsexualism,’’ 14 Archives Sexual Behav. 247
                                      (1985); Cohen-Kettenis & Gooren, ‘‘Transsexualism: A
                                      Review of Etiology, Diagnosis and Treatment,’’ 46 J. Psycho-
                                      somatic Res. 315, 321–22 (1999) (summarizing research);
                                      Lawrence, ‘‘Clinical and Theoretical Parallels Between Desire
                                      for Limb Amputation and Gender Identity Disorder,’’ 35
                                      Archives Sexual Behav. 263 (2006). Scholars of this school
                                      regard SRS as justified—not so much to cure a disease, but
                                      because SRS relieves suffering from an intense, innate, fixed,
                                      but otherwise unobtainable desire. See, e.g., Dreger, ‘‘The
                                      Controversy Surrounding The Man Who Would Be Queen: A
                                      Case History of the Politics of Science, Identity, and Sex in
                                      the Internet Age,’’ 37 Archives Sexual Behav. 366, 383–84
                                      (2008).
                                         These are all intensely contested viewpoints. The fourth
                                      and currently predominant view among those professionally
                                      involved in the field is the one urged by O’Donnabhain, and
                                      Gender Identity Disorders,’’ 30 J. Am. Psychoanalytic Assn. 381, 382 (1982) (‘‘Although the term
                                      ‘gender’ is sometimes used as a synonym for biological ‘sex,’ the two should be distinguished.
                                      Sex refers to the biology of maleness or femaleness, such as a 46,XY karyotype, testes, or a
                                      penis. Gender or gender identity is a psychological construct which refers to a basic sense of
                                      maleness or femaleness or a conviction that one is male or female. While gender is ordinarily
                                      consonant with biology, and so may appear to be a function of it, gender may be remarkably
                                      free from biological constraint. The sense that ‘I am a female’ in transsexualism, for example,
                                      may contrast starkly with a male habitus.’’)




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00054   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      88                 134 UNITED STATES TAX COURT REPORTS                                          (34)


                                      not effectively contested by the Commissioner: that the rea-
                                      son a transsexual person seeks SRS is to correct a particular
                                      type of birth defect—a mismatch between the person’s body
                                      and her gender identity. That mismatch has a name—GID—
                                      if not yet any clinically verifiable origin, and SRS (plus hor-
                                      mone therapy) is simply the correct treatment of the dis-
                                      order.
                                         I profess no expertise in weighing the merits of biodeter-
                                      minism, feminism, or any of the competing theories on this
                                      question. But the majority’s decision to devote significant
                                      analysis to the importance of characterizing GID as a disease,
                                      and SRS as its medically necessary treatment, pulls me into
                                      such matters to give context to the majority’s analysis.

                                                                                          B.

                                        The majority relies heavily on the Benjamin standards to
                                      establish the proper diagnosis and treatment of GID. I cer-
                                      tainly agree that these standards express the consensus of
                                      WPATH—the organization that wrote them and has seen six
                                      revisions of them over the last 30 years. But the consensus
                                      of WPATH is not necessarily the consensus of the entire med-
                                      ical community. The membership of WPATH is limited, con-
                                      sisting of professionals that work with transsexual patients,
                                      including social workers, psychiatrists, and surgeons that
                                      perform SRS.
                                        The Commissioner’s expert, Dr. Schmidt, testified that the
                                      Benjamin standards are merely guidelines rather than true
                                      standards of care and that they enjoy only limited acceptance
                                      in American medicine generally. The majority cites several
                                      psychiatric textbooks that mention the Benjamin standards
                                      to refute Dr. Schmidt’s claim and as evidence of their general
                                      acceptance in the psychiatric profession. Majority op. note 45.
                                      But the textbooks treat the Benjamin standards as mere
                                      guidelines—which may or may not be followed—rather than
                                      clearly endorsing SRS. Let’s take a closer look at the
                                      excerpted language from each of the majority’s sources:




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00055   Fmt 3851    Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           89


                                      • ‘‘[The Benjamin standards] [provide] a valuable guide;’’
                                      • ‘‘[T]he patient may be considered for surgical reassign-
                                      ment;’’
                                      • ‘‘The [Benjamin standards of care] programme includes
                                      * * * possibly sex reassignment * * * patients * * * can be
                                      referred for surgery;’’
                                      • ‘‘[S]ex reassignment may be the best solution;’’ and
                                      • After noting that the treatment of gender identity dis-
                                      orders is ‘‘not as well-based on scientific evidence as some psy-
                                      chiatric disorders,’’ the cited text states that ‘‘[l]iving in the
                                      aspired-to gender role * * * enables one of three decisions: to
                                      abandon the quest, to simply live in this new role, or to pro-
                                      ceed with breast or genital surgery.’’
                                         See majority op. note 45 (all emphasis added and citations
                                      omitted). The textbooks do not say that SRS ‘‘should’’ or
                                      ‘‘must’’ be used as treatment for GID, but only that it ‘‘may’’
                                      or ‘‘can’’ be used. The members of WPATH certainly follow the
                                      Benjamin standards, but since they are merely a ‘‘guide’’ and
                                      ‘‘not as well-based on scientific evidence’’ as other psychiatric
                                      treatments, their general acceptance is questionable. The
                                      American Psychiatric Association’s practice guidelines—gen-
                                      erally accepted standards of care—make no mention of the
                                      Benjamin standards. 2 Even the Benjamin standards them-
                                      selves contain the following caveat in the introduction:
                                        All readers should be aware of the limitations of knowledge in this area
                                      and of the hope that some of the clinical uncertainties will be resolved in
                                      the future through scientific investigation.

                                      The Harry Benjamin International Gender Dysphoria
                                      Association’s Standards of Care for Gender Identity Dis-
                                      orders, Sixth Version 1 (2001).
                                        WPATH is also quite candid that it is an advocate for
                                      transsexual persons, and not just interested in studying or
                                      treating them. Its website includes a downloadable statement
                                      that can be sent to insurers or government agencies denying
                                      reimbursement or payment for surgery to those diagnosed
                                      with GID. WPATH, ‘‘WPATH Clarification on Medical Necessity
                                      of Treatment, Sex Reassignment, and Insurance Coverage in
                                      the U.S.A.,’’ (June 17, 2008), available at http://
                                      www.tgender.net/taw/WPATHMedNecofSRS.pdf (last visited
                                        2 See  APA,     Practice   Guidelines,    http://www.psych.org/MainMenu/PsychiatricPractice/
                                      PracticeGuidelinesl1.aspx (last visited Jan. 7, 2010).




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00056   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      90                 134 UNITED STATES TAX COURT REPORTS                                           (34)


                                      Jan. 7, 2010). But it also comprehensively addresses other
                                      problems it feels should be solved. For example,
                                        Genital reconstruction is not required for social gender recognition, and
                                      such surgery should not be a prerequisite for document or record changes
                                      * * *. Changes to documentation are important aids to social functioning,
                                      and are a necessary component of the pre-surgical process * * *.

                                      Id. at 2. Claims of medical necessity as they affect public-
                                      record rules at least suggest the possibility that WPATH is
                                      medicalizing its advocacy.
                                        And even WPATH’s method of identifying candidates for
                                      SRS—the method we describe and effectively endorse today—
                                      is very much contestable. A leading article (admittedly ten
                                      years old at this point, but still oft cited), concluded on this
                                      topic that ‘‘[u]nfortunately, studies evaluating the indispen-
                                      sability of components of the currently employed procedures
                                      are nonexistent.’’ Cohen-Kettenis & Gooren, supra at 325.

                                                                                          II.

                                        The majority reasons that O’Donnabhain’s hormone
                                      therapy and SRS treat a disease, and so their costs are
                                      deductible expenses of medical care. It then adds a coda to
                                      the opinion holding that these treatments are ‘‘medically nec-
                                      essary.’’ Majority op. p. 76.

                                                                                          A.

                                         The best way of framing the question of deductibility is to
                                      view the medical-expense provisions in the Code as creating
                                      a series of rules and exceptions. Section 262(a) creates a gen-
                                      eral rule that personal expenses are not deductible. Section
                                      213(a) and (d)(1) then creates an exception to the general
                                      rule for the expenses of medical care if they exceed a par-
                                      ticular percentage of adjusted gross income. Section 213(d)(9)
                                      then creates an exception to the exception for cosmetic sur-
                                      gery. And section 213(d)(9)(A) then creates a third-order
                                      exception restoring deductibility for certain types of cosmetic
                                      surgery.
                                         To show how this works in practice, consider reconstructive
                                      breast surgery after a mastectomy. This is a personal
                                      expense (i.e., not incurred for profit, in a trade or business,
                                      etc.). But such surgery affects a ‘‘structure of the body’’ under




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00057   Fmt 3851     Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           91


                                      section 213(d)(1) and so is ‘‘medical care.’’ But it’s presump-
                                      tively ‘‘cosmetic surgery’’ under section 213(d)(9)(B) because,
                                      as reconstructive surgery, 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 dis-
                                      ease.’’ It is nevertheless deductible cosmetic surgery under
                                      section 213(d)(9)(A) because it is ‘‘necessary to ameliorate a
                                      deformity arising from, or directly related to, a * * * dis-
                                      figuring disease.’’
                                         I agree with the majority’s holding that O’Donnabhain’s
                                      GID is a disease. Until the collapse of psychiatry into the
                                      waiting arms of neurology is complete, courts must of neces-
                                      sity rely on the listing and classification of disorders in the
                                      DSM. 3 But once this point is made, we need not go further
                                      into a discussion of the proper standards of care or opine on
                                      their effectiveness. Our precedent, as the majority correctly
                                      points out, allows for the deductibility of treatments that are
                                      highly unlikely to survive rigorous scientific review. See, e.g.,
                                      Dickie v. Commissioner, T.C. Memo. 1999–138 (naturopathic
                                      cancer treatments); Tso v. Commissioner, T.C. Memo. 1980–
                                      399 (Navajo sings as cancer treatment); see also Rev. Rul.
                                      55–261, 1955–1 C.B. 307, 307 (services of Christian Science
                                      practitioners) (subsequent modifications irrelevant). The key
                                      question under section 213(d)(1) is whether the treatment is
                                      therapeutic to the individual involved. See Fischer v.
                                      Commissioner, 50 T.C. 164, 174 (1968).
                                         This is essentially a test looking to the good-faith, subjec-
                                      tive motivation of the taxpayer. There is no doubt that
                                      O’Donnabhain meets it with regard to her hormone therapy
                                      and SRS.
                                        3 The fluidity of changes in the DSM from edition to edition suggests that the nosology of men-

                                      tal disorders is far from being as precise as, for example, the nosology of diseases caused by
                                      bacteria or vitamin deficiencies. I’m therefore somewhat sympathetic to, if ultimately
                                      unpersuaded by (because of the great weight of precedent), the Commissioner’s effort to change
                                      our interpretation of ‘‘disease’’ in section 213 to mean only maladies with a demonstrated or-
                                      ganic cause.
                                        I must, however, note the Commissioner’s alternative argument that ‘‘negative myths and ig-
                                      norance that permeate social thinking in the United States regarding transgendered persons’’
                                      and the ‘‘many laws and legal situations [that] are highly discriminatory for persons with GID’’
                                      mean that the ‘‘suffering experienced by GID patients is primarily inflicted by an intolerant soci-
                                      ety.’’ Resp. Br. at 172–73. (At least compared to the ‘‘elevated status’’ of the Berdache in some
                                      Native American cultures, the Kathoey in Thailand, the Indian Hijra, and the Fa’afafine in the
                                      South Pacific, as the Commissioner anthropologically concludes. Id. at 175.) It is not effective
                                      advocacy to denigrate the people whose government one is representing.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00058   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      92                 134 UNITED STATES TAX COURT REPORTS                                          (34)


                                                                                          B.

                                         1. It is the majority’s next step in the analysis—its reading
                                      of the definition of cosmetic surgery in section 213(d)(9)(B)—
                                      that I cannot join. If it had reasoned simply that to ‘‘treat’’
                                      illness in section 213(d)(9)(B) meant the same low standard
                                      that it does in section 213(d)(1)—a subjective good-faith
                                      therapeutic intent on the part of the patient—and stopped,
                                      we wouldn’t be doing anything controversial. In the absence
                                      of any regulation, there would be no reason to demur,
                                      because as the majority carefully points out, the phrase
                                      ‘‘medical necessity’’ is nowhere in the Code. Majority op. p.
                                      74. Nor of course is medical necessity consistent with the lib-
                                      eral construction of section 213 both by us and by the IRS.
                                      (The deductibility of Navajo sings and Christian Science
                                      prayer did not depend on their medical necessity.) The
                                      phrase occurs in only one place, in what is not even the most
                                      relevant legislative history. Majority op. note 54.
                                         That should have been enough to dispense with the
                                      Commissioner’s argument on this point. But the majority
                                      tacks on an extra section onto its opinion concluding that SRS
                                      and hormone therapy for transsexual persons are ‘‘medically
                                      necessary.’’ Avoidance would have been the sounder course,
                                      because ‘‘medically necessary’’ is a loaded phrase. Construing
                                      it puts us squarely, and unnecessarily, in the middle of a
                                      serious fight within the relevant scientific community, and
                                      the larger battle among those who are deeply concerned with
                                      the proper response to transsexual persons’ desires for exten-
                                      sive and expensive surgeries.
                                         As the majority thoroughly explains, the theory that SRS is
                                      the best—and perhaps the only—treatment for GID has been
                                      extensively promoted. Dr. Brown, O’Donnabhain’s expert wit-
                                      ness, summed up the theory—SRS is medically necessary to
                                      ‘‘cure or mitigate the distress and maladaption caused by
                                      GID.’’ Majority op. p. 43. For governments or insurers to
                                      exclude coverage thus becomes perceived as discrimination or
                                      an unjust deference to stereotypes of transsexual persons.
                                      Acceptance of SRS as medically necessary has become a cause
                                      not only for those with GID, but for a wider coalition as well.
                                      See Jeffreys, supra.
                                         Our discussion of the science is, though, weak even by the
                                      low standards expected of lawyers. Tucked into a footnote is




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00059   Fmt 3851    Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           93


                                      our opinion on the relative merits of the scientific conclusions
                                      of Dr. Brown (O’Donnabhain’s witness in favor of the medical
                                      necessity of SRS) and Dr. Schmidt (the Commissioner’s wit-
                                      ness who was opposed). Majority op. note 56. The reasoning
                                      in that footnote in favor of Dr. Brown’s opinion is that he is
                                      more widely published than Dr. Schmidt. But Dr. Schmidt
                                      was chair of the Sexual Disorders Work Group that drafted
                                      part of the DSM–IV on which the majority relies, and is a
                                      longtime psychiatry professor at Johns Hopkins and a
                                      founder of its Sexual Behavior Consultation Unit. (I think it
                                      fair to take judicial notice that Johns Hopkins is a well-
                                      regarded medical institution.)
                                         The majority also criticizes Dr. Schmidt for citing a reli-
                                      gious publication. See majority op. note 47. It’s true that one
                                      of the sources Dr. Schmidt cited was an article by the former
                                      chairman of Johns Hopkins’ Psychiatry Department in First
                                      Things. But it is inadequate, if we’re going to weigh in on
                                      this debate, to imply that Johns Hopkins’ conclusion was
                                      based merely on an essay in ‘‘a religious publication.’’
                                         First Things, like Commentary and a host of other general-
                                      interest but serious periodicals, seeks out the small subset of
                                      specialists who can write well. 4 Essays by such people don’t
                                      aspire to be original research, but they are often based on
                                      original research. And so was the First Things article by Dr.
                                      McHugh, which summarized the research of a third member
                                      of the Hopkins Psychiatry Department, Dr. Jon Meyer.
                                      Meyer & Reter, ‘‘Sex Reassignment,’’ 36 Archives Gen.
                                      Psychiatry 1010 (1979). In the study, Dr. Meyer followed up
                                      with former Johns Hopkins Gender Identity Clinic patients.
                                      Unlike authors of previous studies, Meyer included both
                                      unoperated GID patients and post-SRS patients in his study—
                                      allowing him to compare the well-being of the operated and
                                      unoperated patients. Using patient interviews, he issued ini-
                                      tial and followup adjustment scores for both the operated and
                                      unoperated patients. Both the operated and unoperated sub-
                                      jects’ mean scores improved after the followup period, but
                                      there was no significant difference between the improvement
                                        4 It is not quite accurate to label First Things, any more than Commentary, a ‘‘religious publi-

                                      cation’’ given the breadth of the subject matter and lack of sectarian slant in what it publishes.
                                      Dr. Schmidt could’ve just as easily cited the same conclusion by the same author in an essay
                                      in The American Scholar. McHugh, ‘‘Psychiatric Misadventures,’’ Am. Scholar 497 (1992). (The
                                      American Scholar is ‘‘untainted’’ by any connection with religion.)




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00060   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      94                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      of each group. The operated group failed to demonstrate clear
                                      objective superiority over the unoperated group—in other
                                      words, SRS didn’t provide any objective improvement to the
                                      GID patients.
                                         There are numerous other clues that the picture of sci-
                                      entific consensus that the majority presents is not quite
                                      right. Consider where the surgeries are currently performed.
                                      SRS was for many years primarily undertaken in research
                                      hospitals that had ‘‘gender identity clinics.’’ 5 These clinics
                                      would conduct research on SRS and evaluate its effectiveness.
                                      Johns Hopkins, under the leadership of Dr. John Money, 6
                                      opened the first U.S. gender identity clinic in 1965. Money
                                      & Schwartz, ‘‘Public Opinion and Social Issues in
                                      Transsexualism: A Case Study in Medical Sociology,’’ in
                                      Transsexualism and Sex Reassignment 253 (Green & Money
                                      eds., 1969). After Johns Hopkins took the lead, other univer-
                                      sity-based clinics jumped at the opportunity to research
                                      transsexualism and perform SRS. 7 But the first research
                                      clinic to perform and study SRS was also the first to cut it
                                      off. The Meyer study had found no significant difference in
                                      adjustment between those who had SRS and those who didn’t,
                                      and in light of that study Johns Hopkins announced in 1979
                                      that it would no longer perform SRS. ‘‘No Surgery for
                                      Transsexuals,’’ Newsweek, Aug. 27, 1979, at 72. After the
                                      Hopkins clinic closed, the other university-based clinics
                                      either closed or ended their university affiliations. Denny,
                                      supra. Stanford, for example, in 1980 spun off its university-
                                      affiliated clinic to a private center that performed SRS but
                                      didn’t conduct research. Levy, ‘‘Two Transsexuals Reflect on
                                      University’s Pioneering Gender Dysphoria Program,’’ Stan-
                                      ford Rep., May 3, 2000.
                                         5 For an overview of the gender clinics, see Denny, ‘‘The University-Affiliated Gender Clinics,

                                      and How They Failed to Meet the Needs of Transsexual People,’’ Transgender Tapestry #098,
                                      Summer 2002, available at http://www.ifge.org/Article59.phtml (last visited Jan. 7, 2010).
                                         6 Dr.   Money     was    extremely     influential   in   gender     identity    studies.   See
                                      Witte, ‘‘John Money; Helped Create Studies on Gender Identity,’’ Associated Press,
                                      July 10, 2006, available at http://www.boston.com/news/globe/obituaries/articles/2006/07/10/
                                      johnlmoneylhelpedlcreatelstudieslonlgenderlidentity/ (last visited Jan. 7, 2010). But
                                      there is now a consensus that some of his most noteworthy work was unethical, and in some
                                      respects fraudulent. See Colapinto, ‘‘The True Story of John/Joan,’’ Rolling Stone, Dec. 11, 1997,
                                      at 54; Kipnis & Diamond, ‘‘Pediatric Ethics and the Surgical Assignment of Sex,’’ 9 J. Clinical
                                      Ethics 398 (Winter 1998).
                                         7 The University of Minnesota, UCLA, Vanderbilt, UVA, Stanford, and Duke were among the

                                      more prominent university-based gender identity clinics conducting research. Denny, supra note
                                      5.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00061   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           95


                                         Eventually, all university-based research clinics stopped
                                      the practice of SRS. 8 Id. Today, SRS in the United States is
                                      primarily the purview of a few boutique surgery practices.
                                      While     such     surgeons—including     O’Donnabhain’s—are
                                      undoubtedly skilled in their art, they do not have the
                                      capacity to conduct research on the medical necessity of SRS
                                      like the research hospitals. Their practices use the Benjamin
                                      standards, but do not seem to conduct peer-reviewed studies
                                      of their efficacy.
                                         It is true that the Meyer piece has been the subject of
                                      lively controversy, 9 but it is certainly the case that it
                                      prompted Hopkins to get out of the SRS business; and over
                                      the next few years every other teaching hospital also left the
                                      field. Denny, supra. If we needed to opine on the medical
                                      necessity of SRS, some sensitivity to that academic con-
                                      troversy, particularly the problem of how to set up a proxy
                                      control group for those undergoing sex reassignment, as well
                                      as some sensitivity to defining and measuring the effective-
                                      ness of surgery, would have to be shown. I do not believe we
                                      should have addressed the issue. 10
                                         2. There is, however, a related cluster of problems that
                                      judges and lawyers have had to solve—questions of the med-
                                      ical necessity of SRS in:
                                      • Eighth Amendment prisoner cases;
                                      • ERISA litigation; and
                                      • Medicaid and Medicare reimbursement.
                                        8 Some research hospitals, Stanford among them, will perform SRS on a referral basis—but

                                      the clinical research on SRS at these hospitals has been shut down. Levy, ‘‘Two Transsexuals
                                      Reflect on University’s Pioneering Gender Dysphoria Program,’’ Stanford Rep., May 3, 2000.
                                        9 There has been at least one study that reached a different conclusion using a somewhat simi-

                                      lar methodology. See Mate-Kole et al., ‘‘A Controlled Study of Psychological and Social Change
                                      After Surgical Gender Reassignment in Selected Male Transsexuals,’’ 157 Brit. J. Psychiatr. 261
                                      (1990). There have also been numerous studies without controls (or the sort of quasi-controls
                                      that Meyer used) that report transsexual persons generally satisfied with the results of SRS.
                                      Such studies are as problematic as would be drug studies without double-blind control groups.
                                      The question is further complicated by the possibility that different types of transsexuals, see
                                      Blanchard, ‘‘Typology of Male-to-Female Transsexualism,’’ 14 Archives Sexual Behav. 247
                                      (1985), will experience different outcomes; as might female-to-male transsexuals compared to
                                      male-to-female transsexuals. See generally Cohen-Kettenis & Gooren, supra at 326–28.
                                        My point is not to pick Meyer over Mate-Kole, but only to suggest the problem is much more
                                      complicated than the majority lets on. It is certainly beyond the competence of tax judges.
                                        10 The feelings on both sides may cause the controversy to slip out of science altogether and

                                      land in the politics of the APA as it prepares the next edition of the DSM. See Carey, ‘‘Psychia-
                                      try’s Struggle to Revise the Book of Human Troubles,’’ N.Y. Times, Dec. 18, 2008, at A1 (describ-
                                      ing petition campaigns to affect membership of drafting group, and disputes among
                                      transgendered persons about whether GID should even be classified as a disorder).




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00062   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      96                 134 UNITED STATES TAX COURT REPORTS                                         (34)


                                         The majority correctly cites the decisions of seven circuit
                                      courts that have concluded GID constitutes a ‘‘serious medical
                                      need’’ for purposes of the Eighth Amendment. Majority op. p.
                                      62. While confirming that GID is a ‘‘profound psychiatric dis-
                                      order,’’ see, e.g., Maggert v. Hanks, 131 F.3d 670, 671 (7th
                                      Cir. 1997), no circuit court has in this area held that SRS—
                                      or even the less-invasive hormone therapy—is a ‘‘medically
                                      necessary’’ treatment for GID. At least one has even empha-
                                      sized that there is no right to ‘‘any particular type of treat-
                                      ment, such as estrogen therapy.’’ Meriwether v. Faulkner,
                                      821 F.2d 408, 413 (7th Cir. 1987) (citing Supre v. Ricketts,
                                      792 F.2d 958 (10th Cir. 1986), in which the court refused to
                                      hold that a prison’s decision not to provide a self-injuring
                                      prisoner with estrogen violated the Eighth Amendment as
                                      long as some form of treatment for GID was provided); Lamb
                                      v. Maschner, 633 F. Supp. 351 (D. Kan. 1986) (finding prison
                                      officials were not constitutionally required to provide pris-
                                      oner with specific treatment requested of hormones and SRS).
                                      Judge Posner’s summary of the GID-prisoner cases is instruc-
                                      tive:
                                        Does it follow that prisons have a duty to administer (if the prisoner
                                      requests it) * * * [SRS] to a prisoner who unlike Maggert is diagnosed as
                                      a genuine transsexual? The cases do not answer ‘‘yes,’’ but they make the
                                      question easier than it really is by saying that the choice of treatment is
                                      up to the prison. The implication is that less drastic (and, not incidentally,
                                      less costly) treatments are available for this condition. * * *

                                      Maggert, 131 F.3d at 671 (citations omitted).
                                         The medical necessity of SRS shows up in ERISA litigation
                                      as well. See, e.g., Mario v. P & C Food Mkts., Inc., 313 F.3d
                                      758 (2d Cir. 2002). Mario, a female-to-male transsexual, sued
                                      for reimbursement of the cost of his sex-reassignment sur-
                                      gery from his employer’s ERISA-governed health insurance
                                      plan. The plan administrator denied his claim for lack of
                                      medical necessity based on an investigation that included the
                                      following:
                                      [r]esearch on the issue of transsexualism, inquiry into the policies of other
                                      employers and insurance carriers concerning coverage of gender reassign-
                                      ment procedures, consultation with medical centers having specialized
                                      knowledge of transsexualism and sexual reassignment surgeries, and con-
                                      sultation with medical personnel employed by [the plan administrator],
                                      including a psychiatrist retained by [the plan administrator], Dr. Ivan
                                      Fras. Dr. Fras opined that the surgical removal of healthy organs, for no




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00063   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                            97


                                      purpose other than gender dysphoria, would fall into the category of cos-
                                      metic surgery, and would therefore not be ‘‘medically necessary.’’ On the
                                      basis of her investigation, * * * [the plan administrator employee] con-
                                      cluded that there was substantial disagreement in the medical community
                                      about whether gender dysphoria was a legitimate illness and uncertainty
                                      as to the efficacy of reassignment surgery. * * *

                                      Id. at 765–66. The plan administrator’s SRS-lacks-medical-
                                      necessity conclusion survived de novo review by the Second
                                      Circuit.
                                        Medicare’s administrator—The Centers for Medicare and
                                      Medicaid Services—has weighed in on the issue by denying
                                      reimbursement for SRS on the following basis: 11
                                         Because of the lack of well controlled, long term studies of the safety and
                                      effectiveness of the surgical procedures and attendant therapies for
                                      transsexualism, the treatment is considered experimental. Moreover, there
                                      is a high rate of serious complications of these surgical procedures. For
                                      these reasons, transsexual surgery is not covered.

                                      54 Fed. Reg. 34572 (Aug. 21, 1989).
                                         The legal issues presented in each of these clusters of cases
                                      differ from the legal question—are O’Donnabhain’s proce-
                                      dures deductible under section 213?—that we face in this
                                      case, but I think they illustrate the majority’s overreach in
                                      finding SRS ‘‘medically necessary.’’

                                                                                      III.

                                        I do not think that highlighting what I think is the incor-
                                      rect interpretation of the Code by the majority is enough.
                                      O’Donnobhain carefully argued in the alternative, and it is to
                                      those alternative arguments that I now turn.

                                                                                          A.

                                       I start back at the beginning with section 213(d)(1)(A),
                                      which defines ‘‘medical care’’ to include not just amounts
                                        11 Some cases hold that states cannot categorically exclude sex-change operations from Med-

                                      icaid coverage. Pinneke v. Preisser, 623 F.2d 546, 549–550 (8th Cir. 1980); J.D. v. Lackner, 145
                                      Cal. Rptr. 570 (Ct. App. 1978); G.B. v. Lackner, 145 Cal. Rptr. 555 (Ct. App. 1978); Doe v. Minn.
                                      Dept. of Pub. Welfare, 257 N.W.2d 816 (Minn. 1977). Over time, these decisions have been over-
                                      taken by regulation or statute. See, e.g., Smith v. Rasmussen, 249 F.3d 755, 760–61 (8th Cir.
                                      2001) (upholding regulation overturning Pinneke as reasonable).
                                        Until recently, Minnesota was the only state in which Medicaid paid for SRS. Price, ‘‘Min-
                                      nesota Using Medicaid Funding to Pay for Sex-Change Operations,’’ Wash. Times, Feb. 4, 1996,
                                      at A4. But four years ago, it joined the rest of the states. Minn. Stat. Ann. sec. 256B.0625 subd.
                                      3a (West 2007).




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00064   Fmt 3851    Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      98                 134 UNITED STATES TAX COURT REPORTS                                          (34)


                                      paid for the ‘‘diagnosis, cure, mitigation, treatment, or
                                      prevention or disease,’’ but also amounts paid ‘‘for the pur-
                                      pose of affecting any structure or function of the body.’’ The
                                      Commissioner actually stipulated that all three procedures
                                      O’Donnabhain received that are at issue here—hormone
                                      treatment, SRS, and breast augmentation—meet this alter-
                                      nate definition of ‘‘medical care.’’ 12
                                        This should have obviated the need to wade into the dis-
                                      putes about classification, etiology, and diagnosis of
                                      O’Donnabhain’s GID. The majority does cite one sentence
                                      from the applicable regulation for the proposition that med-
                                      ical care is confined to expenses ‘‘ ‘incurred primarily for the
                                      prevention or alleviation of a physical or mental defect or ill-
                                      ness.’ ’’ Majority op. p. 65 (quoting section 1.213–1(e)(1)(ii),
                                      Income Tax Regs.). But that sentence doesn’t apply to the
                                      second type of medical care—lest it be somehow read to over-
                                      turn even the IRS’s settled opinion that procedures as diverse
                                      as abortion, Rev. Rul. 73–201, 1973–1 C.B. 140, vasectomies,
                                      id., and face lifts, Rev. Rul. 76–332, 1976–2 C.B. 81, qualify
                                      as ‘‘medical care’’ because they affect a structure or function
                                      of the body. (That’s what the first sentence of section 1.213–
                                      1(e)(1)(ii), Income Tax Regs., says. 13)
                                        There is therefore little doubt that the expenses
                                      O’Donnabhain incurred qualify as medical care under section
                                      213(d)(1)(A). But are they nondeductible ‘‘cosmetic surgery?’’

                                                                                          B.

                                         Under section 213(d)(9)(B), it is a necessary condition for
                                      characterization as ‘‘cosmetic surgery’’ that a procedure be
                                      ‘‘directed   at   improving    the    patient’s  appearance.’’
                                      O’Donnabhain urges us to find that her procedures were
                                      directed at resolving or reducing the psychological distress at
                                      feeling herself trapped in a body of the wrong sex. The
                                      Commissioner says that may be true, but the procedures
                                      involved obviously changed her appearance.
                                        12 Here’s what the Commissioner stipulated: ‘‘Petitioner’s sex reassignment surgery affected

                                      structures or functions of petitioner’s body;’’ ‘‘Petitioner’s prescription hormone therapy affected
                                      structures or functions of petitioner’s body;’’ and ‘‘Petitioner’s breast augmentation surgery af-
                                      fected structures or functions of petitioner’s body.’’
                                        13 The sentence quoted by the majority is, in context, aimed at distinguishing expenses aimed

                                      directly, rather then remotely, at preventing or alleviating illness. It is immediately followed by
                                      a list of expenses that are per se medical-care expenses, and which includes surgery and pre-
                                      scription drugs (like hormones) that O’Donnabhain received.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00065   Fmt 3851    Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           99


                                         There is no regulation helping us to apply this language;
                                      we need to use the traditional judicial tools to do so. This
                                      first requires us to parse the meaning of ‘‘directed at’’ and
                                      ‘‘improving’’. ‘‘Directed at’’ as a phrase is nowhere else in the
                                      Code and is not a specialized legal or tax term, but it has a
                                      common meaning of ‘‘focused at,’’ or ‘‘concentrating on.’’
                                      ‘‘Improving’’ is likewise a word in ordinary use, meaning ‘‘to
                                      enhance,’’ or ‘‘make more desirable.’’ Webster’s Third New
                                      International Dictionary (1961).
                                         The legislative history of the provision, which the majority
                                      quotes, lists some of the procedures that Congress aimed at
                                      including in the presumptively nondeductible category:
                                      under 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 nec-
                                      essary to promote the proper function of the body and only incidentally
                                      affect the patient’s appearance or expenses for the treatment of a dis-
                                      figuring condition arising from a congenital abnormality, personal injury
                                      or trauma, or disease (such as reconstructive surgery following removal of
                                      a malignancy) continue to be deductible * * *.

                                      Majority op. note 27. The list isn’t in the Code itself, so it’s
                                      not quite right to hold we must apply the maxim of ejusdem
                                      generis, but it is helpful in suggesting the meaning of the key
                                      words that did make it into law. Without more specific guid-
                                      ance from the Secretary in the form of a regulation, I would
                                      conclude that ‘‘directed at improving’’ reflects two concepts.
                                      The first is that the subjective motivation of the patient (his
                                      ‘‘focus’’) is important, and it is his primary motivation that
                                      is most important. The second is that the notion of
                                      ‘‘improving’’ suggests a baseline from which something is
                                      improved—all the procedures in the committee’s list are
                                      those commonly recognized by the average observer in our
                                      society as improving appearance in a way that a biological
                                      man’s taking female hormones and undergoing extensive
                                      genital surgery do not. (I also concur with the majority that
                                      the breast surgery did not ‘‘treat disease.’’)
                                          I therefore end up in the same place as the majority.
                                      O’Donnabhain’s hormone treatment and SRS established a
                                      biological baseline of a new sexual appearance for her. It
                                      was, of course, foreseeable, and she intended, to change her
                                      appearance. But I also agree with her (as the majority does)
                                      that her purpose was to relieve the pathological anxiety or




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00066   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      100                134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      distress at being biologically male (or, alternatively, at not
                                      feeling masculine). Majority op. note 52. Hormones and SRS
                                      are, I would hold as a general matter in such cases, directed
                                      at treating GID in this sense and do not so much improve
                                      appearance as create a new one.
                                         But the breast-augmentation surgery is different.
                                      O’Donnabhain’s new baseline having been established
                                      through hormones, I would hold that that surgery was
                                      directed at improving—in the sense of focused on changing
                                      what she already had—her already radically altered appear-
                                      ance. Denying the deduction for this procedure while
                                      allowing it for the hormones and SRS also seems a reasonable
                                      distinction—breast surgery is likely one of the commonest
                                      types of cosmetic surgery and (if not undergone after cancer
                                      surgery or trauma or the like) highly likely to be within the
                                      common public meaning of that phrase.
                                         That leaves only the question of whether O’Donnabhain’s
                                      breast-augmentation surgery meets one of the exceptions to
                                      the nondeductibility of cosmetic surgery listed in subsection
                                      (d)(9)(A). This is easy—O’Donnabhain never argued her
                                      breasts were deformed by ‘‘a congenital abnormality, a per-
                                      sonal injury resulting from an accident or trauma, or dis-
                                      figuring disease.’’
                                         I therefore respectfully concur with majority’s result, if not
                                      its reasoning.
                                         GOEKE, J., agrees with this concurring opinion.



                                         GOEKE, J., concurring in the result only: Although I concur
                                      in the result reached by the majority, I respectfully disagree
                                      with the majority’s analysis of section 213.
                                         ‘‘Whether and to what extent deductions shall be allowed
                                      depends upon legislative grace; and only as there is clear
                                      provision therefor can any particular deduction be allowed.’’
                                      New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).
                                      As a general rule, ‘‘personal, living, or family expenses’’ are
                                      not deductible. Sec. 262. As an exception to that general rule
                                      petitioner relies on section 213, which allows a deduction for
                                      ‘‘expenses paid * * * for medical care’’. Section 213(d)(1)(A)
                                      defines deductible ‘‘medical care’’ to include ‘‘the diagnosis,
                                      cure, mitigation, treatment, or prevention of disease, or for




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00067   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           101


                                      the purpose of affecting any structure or function of the
                                      body’’. We have consistently construed the medical expense
                                      deduction ‘‘narrowly’’ for over 40 years. Atkinson v. Commis-
                                      sioner, 44 T.C. 39, 49 (1965); Magdalin v. Commissioner, T.C.
                                      Memo. 2008–293. This case turns on whether petitioner’s
                                      claimed deductions are barred by the exclusion in section
                                      213(d)(9). If medical deductions are construed narrowly, it
                                      follows that statutory exclusions from medical deduction
                                      should be construed broadly.
                                         This case presents the question whether the cost of surgery
                                      to alter nondisfigured, healthy tissue is deductible when the
                                      surgery is performed to address a mental disorder or disease.
                                         Section 213(d)(9) provides:
                                           (9) COSMETIC SURGERY.—
                                             (A) IN GENERAL.—The term ‘‘medical care’’ does not include cosmetic
                                           surgery or other similar procedures, unless the surgery or procedure is
                                           necessary to ameliorate a deformity arising from, or directly related to,
                                           a congenital abnormality, a personal injury resulting from an accident
                                           or trauma, or disfiguring disease.
                                             (B) COSMETIC SURGERY DEFINED.—For purposes of this paragraph, the
                                           term ‘‘cosmetic surgery’’ means any procedure which is directed at
                                           improving the patient’s appearance and does not meaningfully promote
                                           the proper function of the body or prevent or treat illness or disease.

                                         The majority opinion relies on two of the last four words
                                      to the exclusion of the rest of section 213(d)(9)(B) in allowing
                                      a deduction for petitioner’s genital surgery by concluding
                                      that petitioner suffered from a ‘‘disease’’ and that the genital
                                      surgery in question ‘‘[treated]’’ that disease.
                                         The definition of ‘‘cosmetic surgery’’ in subparagraph (B)
                                      begins with surgery ‘‘directed at improving the patient’s
                                      appearance’’. The transformation of petitioner’s genitals was
                                      not directed at improving petitioner’s appearance but rather
                                      was functional. The authorities cited in the majority opinion
                                      for the proposition that genital surgery to treat GID is not
                                      cosmetic surgery support this conclusion. See, e.g., White v.
                                      Farrier, 849 F.2d 322 (8th Cir. 1988). Given the factual
                                      findings supporting the medical purpose of such surgery, it
                                      is therefore deductible as medical care under section 213(a)
                                      and is not excluded by section 213(d)(9) because it is not cos-
                                      metic surgery. On that basis I concur in the majority’s
                                      allowing petitioner a deduction for genital surgery.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00068   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      102                134 UNITED STATES TAX COURT REPORTS                                         (34)


                                         Having concluded that petitioner’s genital surgery is not
                                      cosmetic, I would reject the notion that it is nevertheless
                                      excluded as a ‘‘similar [procedure]’’ under section
                                      213(d)(9)(A). Such a reading would negate the import of the
                                      definition of cosmetic surgery in subparagraph (B). Rather, I
                                      believe ‘‘similar procedures’’ in subparagraph (A) refers to
                                      procedures directed at improving appearance that are not
                                      necessarily considered surgical. Accordingly, petitioner’s hor-
                                      mone therapy is not a similar procedure under section
                                      213(d)(9)(A) because it was in support of petitioner’s genital
                                      surgery and was not directed at improving petitioner’s
                                      appearance. On the other hand, Botox injections would be an
                                      example of a similar procedure in my view.
                                         I disagree with the majority opinion because it leaves open
                                      the possibility that expenses for surgery directed solely at
                                      altering physical appearance may nevertheless be deductible
                                      if it is intended to alleviate mental pain and suffering. I do
                                      not read the word ‘‘treat’’ in the context of section
                                      213(d)(9)(B) to include physically altering a patient’s appear-
                                      ance to relieve extreme mental distress. Therefore, I would
                                      hold that the breast surgery is excluded ‘‘cosmetic surgery’’
                                      under section 213(d)(9) as a matter of law, and to this extent
                                      I agree with Judge Gustafson’s concurring in part and dis-
                                      senting in part opinion.
                                         I would read the statute in conformity with the legislative
                                      history. I believe that the word ‘‘treat’’ in the context of the
                                      cosmetic surgery exclusion implies that for expenses for any
                                      procedure to be deductible, the procedure must address a
                                      physically related malady. If surgery to relieve mental suf-
                                      fering without a physical nexus is deductible, a line is
                                      crossed from physical to mental treatment. A court should
                                      not cross that line in applying section 213. Any expansion of
                                      the medical expense deduction should be addressed by Con-
                                      gress because it is not clear that surgery which does not
                                      address a physical condition is deductible under section
                                      213(d)(9).
                                         The majority holds that the line on deductibility for mental
                                      conditions has been crossed in general and that evolving
                                      mental diagnoses are considered diseases for purposes of sec-
                                      tion 213(d)(1)(A). I think this argument overlooks the nature
                                      of the exclusion in paragraph (9). The standard for deduct-
                                      ibility under section 213(d)(1)(A) is inherently more generous




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00069   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           103


                                      than that in subsection (d)(9). Congress enacted section
                                      213(d)(9) in response to IRS interpretations of ‘‘medical care’’
                                      as including procedures that permanently altered any struc-
                                      ture of the body even if the procedure was considered to be
                                      an elective, purely cosmetic treatment. As the majority points
                                      out, majority op. note 27, the impetus for section 213(d)(9)
                                      was the Senate. The Senate Finance Committee report
                                      stated:
                                      under 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 nec-
                                      essary to promote the proper function of the body and only incidentally
                                      affect the patient’s appearance or expenses for the treatment of a dis-
                                      figuring condition arising from a congenital abnormality, personal injury
                                      or trauma, or disease (such as reconstructive surgery following removal of
                                      a malignancy) continue to be deductible * * *.

                                      There is no indication that the exclusion of surgery directed
                                      at improving appearance omits surgery related to helping a
                                      person feel differently about himself or herself even if such
                                      a change in feelings relieves mental suffering. The above-
                                      quoted language from the Senate Finance Committee report
                                      indicates that Congress intended to allow deductions only for
                                      cosmetic surgery to correct physical maladies resulting from
                                      disease or physical disfigurement, as opposed to cosmetic sur-
                                      gery on healthy tissue. The report uses ‘‘malignancy’’ as an
                                      example of a disease which can cause a deformity requiring
                                      cosmetic surgery which would be deductible.
                                         Accepting that the alteration of physical appearance can be
                                      a remedy to address a mental illness, the question remains
                                      whether deductions for such treatment are barred by a spe-
                                      cific legislative mandate. I would hold that the breast sur-
                                      gery in this case is not medically necessary as that term is
                                      applied in deciding whether an expense is excluded under
                                      section 213(d)(9). The nuances of feminine appearance are
                                      virtually without bounds, and expenses for efforts to conform
                                      petitioner’s entire body to a feminine ideal are indistinguish-
                                      able from excluded expenses regardless of petitioner’s mental
                                      health.
                                         In other contexts there is little question that deductions for
                                      breast augmentation or facial reconstruction surgery apart
                                      from physical disease or disfigurement or physical abnor-
                                      mality would be barred by section 213(d)(9). The issue is




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00070   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      104                134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      whether Congress intended to allow deductions for those sur-
                                      geries if done to relieve a mental disease or illness. I remain
                                      unconvinced that Congress intended to permit deductions for
                                      such surgery directed at appearance and not directed at
                                      physical disfigurement or physical dysfunction or physical
                                      disease. To accept that deductibility is possible under dif-
                                      ferent facts is to entertain that all forms of cosmetic surgery
                                      will be deductible medical expenses if the surgery addresses
                                      or relieves mental suffering caused by a recognized mental
                                      disorder. I do not agree that the statute read in its entirety
                                      permits such deduction.
                                        HOLMES, J., agrees with this concurring in the result only
                                      opinion.



                                         FOLEY, J., concurring in part 1 and dissenting in part: Pre-
                                      occupied with establishing whether gender identification dis-
                                      order (GID) is a disease, respondent and the majority fail to
                                      correctly explicate and apply the statute. In allowing deduc-
                                      tions relating to petitioner’s expenses, the majority has per-
                                      formed, on congressional intent, interpretive surgery even
                                      more extensive than the surgical procedures at issue—and
                                      respondent has dutifully assisted. This judicial trans-
                                      formation of section 213(d)(9) is more than cosmetic.
                                      I. The Majority Does Not Adhere to the Plain Language of
                                         Section 213(d)(9)
                                           Section 213(d) provides in part:
                                           (9) COSMETIC SURGERY.—
                                             (A) IN GENERAL.—The term ‘‘medical care’’ does not include cosmetic
                                           surgery or other similar procedures, unless the surgery or procedure is
                                           necessary to ameliorate a deformity arising from, or directly related to,
                                           a congenital abnormality, a personal injury resulting from an accident
                                           or trauma, or disfiguring disease.
                                             (B) COSMETIC SURGERY DEFINED.—For purposes of this paragraph, the
                                           term ‘‘cosmetic surgery’’ means any procedure which is directed at
                                           improving the patient’s appearance and does not meaningfully promote
                                           the proper function of the body or prevent or treat illness or disease.
                                           [Emphasis added.]
                                        1 I concur with the majority’s conclusion that petitioner’s breast augmentation surgery is ‘‘cos-

                                      metic surgery’’ but disagree with the majority’s reasoning (i.e., conclusion that failure to strictly
                                      adhere to the Benjamin standards constitutes failure to ‘‘treat’’ gender identification disorder)
                                      and interpretation of the statute.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00071   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           105


                                      The majority states that section 213(d)(9)(B) ‘‘excludes from
                                      the definition any procedure’’ (emphasis added) that pro-
                                      motes bodily function or treats a disease. See majority op. p.
                                      52. The statutory definition, however, prescribes what is
                                      included, not excluded, from the definition of cosmetic sur-
                                      gery. The statute sets forth a two-part test: a procedure is
                                      cosmetic surgery if it (1) is directed at improving appearance
                                      and (2) does not meaningfully promote proper bodily function
                                      or 2 prevent or treat illness or disease. Part two of the test
                                      is disjunctive, not conjunctive. A procedure ‘‘directed at
                                      improving the patient’s appearance’’ is cosmetic surgery if it
                                      either does not ‘‘meaningfully promote the proper function of
                                      the body’’ or does not ‘‘prevent or treat illness or disease.’’
                                      Thus, if petitioner’s procedures are ‘‘directed at improving
                                      * * * appearance’’ and ‘‘[do] not meaningfully promote the
                                      proper function of the body’’, they are cosmetic surgery with-
                                      out regard to whether they treat a disease. The majority does
                                      not address either of these prongs but, instead, asserts that
                                      these prongs are irrelevant if the procedures treat a disease.
                                      See majority op. note 30.
                                         The majority’s analysis proceeds as if the statute employs
                                      ‘‘and’’ rather than ‘‘or’’ between the ‘‘meaningfully promote
                                      the proper function of the body’’ and ‘‘prevent or treat illness
                                      or disease’’ prongs. Respondent appears to agree with this
                                      interpretation in lieu of a plain reading of the statute. In
                                      essence, the majority and respondent engage in reconstruc-
                                      tion, rather than strict construction, of section 213(d)(9).
                                      According to their interpretation, a procedure will be treated
                                      as cosmetic surgery only if it meets all three prongs (i.e., it
                                      is directed at improving appearance, does not promote proper
                                      bodily function, and does not prevent or treat illness or dis-
                                      ease).
                                         Simply put, the fact that a procedure treats a disease is
                                      not sufficient to exclude the procedure from the definition of
                                      ‘‘cosmetic surgery’’. Indeed, to adopt the majority’s reasoning
                                      and its accompanying conclusion the Court must ignore that
                                      Congress in section 213(d)(9)(A) specifically provides that the
                                      term ‘‘medical care’’ will include ‘‘cosmetic surgery or other
                                        2 While ‘‘use of the conjunctive ‘and’ in a list means that all of the listed requirements must

                                      be satisfied * * * use of the disjunctive ‘or’ means that only one of the listed requirements need
                                      be satisfied.’’ Kim, Statutory Interpretation: General Principles and Recent Trends 8 (CRS Re-
                                      port for Congress, updated Aug. 31, 2008).




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00072   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      106                134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      similar procedures’’ if the ‘‘surgery or procedure is necessary
                                      to ameliorate a deformity arising from, or directly related to,
                                      a * * * disfiguring disease.’’ (Emphasis added.) If any proce-
                                      dure that treats a disease (i.e., as the majority broadly inter-
                                      prets that phrase), see majority op. p. 65, is automatically
                                      carved out from the definition of cosmetic surgery, then the
                                      section 213(d)(9)(A) specific exclusion, relating to procedures
                                      that ameliorate a deformity arising from a disfiguring dis-
                                      ease, is superfluous. See TRW Inc. v. Andrews, 534 U.S. 19,
                                      31 (2001) (stating that it is ‘‘ ‘a cardinal principle of statutory
                                      construction’ that ‘a statute ought, upon the whole, to be so
                                      construed that, if it can be prevented, no clause, sentence, or
                                      word shall be superfluous, void, or insignificant.’ ’’ (quoting
                                      Duncan v. Walker, 533 U.S. 167, 174 (2001))). Congress in
                                      section 213(d)(9)(A) readily acknowledges that certain proce-
                                      dures which treat disease may be cosmetic and ensures that
                                      these procedures will nevertheless be deemed medical care if
                                      they ameliorate a deformity. Sex reassignment surgery (SRS)
                                      and the accompanying procedures did not make the list.
                                         Judge Halpern asserts that this analysis ‘‘disregards the
                                      rules of grammar and logic’’ and that De Morgan’s laws dic-
                                      tate the majority’s holding. Halpern op. p. 83. If there is a
                                      negation of the conjunction ‘‘or’’, De Morgan’s laws convert
                                      ‘‘or’’ to ‘‘and’’. Judge Halpern’s mechanical application of De
                                      Morgan’s laws is not prudent. Simply put, congressional
                                      intent is not subservient to De Morgan’s laws. Courts dealing
                                      with statutes that contain the negation of a conjunction have
                                      employed interpretive principles to ensure adherence to Con-
                                      gress’ plain language. 3 In short, section 213(d)(9) must be
                                         3 This tension between Congress’ plain language and De Morgan’s laws was evident in the in-

                                      terpretation of a property forfeiture statute which contained the negation of a conjunction (i.e.,
                                      ‘‘without the knowledge or consent’’). See 21 U.S.C. sec. 881(a)(7) (1988); United States v. 171–
                                      02 Liberty Ave., 710 F. Supp. 46 (E.D.N.Y. 1989); cf. United States v. 141st Street Corporation,
                                      911 F.2d 870 (2d Cir. 1990). Rather than applying De Morgan’s laws and interpreting the statu-
                                      tory language to mean ‘‘without the knowledge and without the consent’’, the District Court fol-
                                      lowed legislative intent, adhered to a plain reading, and interpreted the language to mean
                                      ‘‘without the knowledge or without the consent’’. United States v. 171–02 Liberty Ave., supra at
                                      50. The court held:
                                         Under normal canons of statutory construction, the court must give effect to Congress’ use
                                      of the word ‘‘or’’ by reading the terms ‘‘knowledge’’ and ‘‘consent’’ disjunctively. * * *
                                         * * * If Congress had meant to require a showing of lack of knowledge in all cases, as sug-
                                      gested by the Government, it could have done so by replacing ‘‘or’’ with ‘‘and.’’ * * * [Id.]
                                      To apply De Morgan’s laws and ignore the plain language of the statute would have been impru-
                                      dent because, as one commentator accurately opined, ‘‘we have no way of telling whether the
                                      drafters of the statute intended that De Morgan’s Rules apply or not’’. Solan, The Language of




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00073   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           107


                                      interpreted with cognizance of the fact that this section was
                                      enacted by a Congress intent on limiting deductions for
                                      procedures directed at improving appearance and that
                                      Augustus De Morgan was not a member of the 101st Con-
                                      gress.
                                      II. The Legislative History Provides No Support for the
                                          Deduction of Petitioner’s Expenses
                                         The lack of unanimity among my colleagues may suggest
                                      that section 213(d)(9) is ambiguous and thus resort to legisla-
                                      tive history may be appropriate. See Anderson v. Commis-
                                      sioner, 123 T.C. 219, 233 (2004), affd. 137 Fed. Appx. 373
                                      (1st Cir. 2005). The sparse legislative history accompanying
                                      the enactment of section 213(d)(9) is quite illuminating.
                                      There is certainly no indication that Congress sought to pre-
                                      serve a deduction for expenses relating to SRS and the accom-
                                      panying procedures. To the contrary, the legislative history
                                      states that Congress intended to preserve deductions relating
                                      to:
                                      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 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) * * *. [136 Cong. Rec. 30485,
                                      30570 (1990); emphasis added.]

                                      Expenses relating to SRS and the accompanying procedures
                                      again did not make the list.
                                      III. Even If Not Cosmetic Surgery, Petitioner’s Procedures
                                           May Be ‘‘Similar’’ to Cosmetic Surgery
                                        Section 213(d)(9)(A) provides that ‘‘The term ‘medical care’
                                      does not include cosmetic surgery or other similar procedures,
                                      unless the surgery or procedure is necessary to ameliorate a
                                      deformity arising from, or directly related to, a congenital
                                      abnormality, a personal injury resulting from an accident or
                                      trauma, or disfiguring disease.’’ (Emphasis added.) Assuming
                                      arguendo that the majority’s analysis of section 213(d)(9)(B)
                                      is correct, petitioner must nevertheless establish that SRS
                                      and the accompanying procedures are not ‘‘similar’’ to cos-
                                      Judges 45, 52 (1993). See generally id. at 45–46, 49–53 (discussing how courts have dealt with
                                      statutes containing the negation of ‘‘and’’ and ‘‘or’’).




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00074   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      108                134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      metic surgery. The majority does not expound on this issue
                                      but states:
                                      by arguing that the hormone therapy was directed at improving peti-
                                      tioner’s appearance and did not treat an illness or disease, respondent con-
                                      cedes 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 meaning-
                                      fully promote the proper function of the body or prevent or treat illness
                                      or disease’’. [Majority op. note 31; emphasis added.]

                                      This analysis of the statute is simply wrong. The term
                                      ‘‘similar procedures’’ is not ‘‘delimited by the definition of
                                      ‘cosmetic surgery’ in sec[tion] 213(d)(9)(B)’’. While it is
                                      arguable that it could be defined in this manner, that is not
                                      what the statute provides. ‘‘Cosmetic surgery’’ is defined in
                                      section 213(d)(9)(B), but there is no statutory or regulatory
                                      guidance regarding what constitutes ‘‘similar procedures’’.
                                      Respondent, who has the authority to promulgate guidance
                                      defining ‘‘similar procedures’’ and has broad latitude
                                      regarding his litigation position, inexplicably conceded this
                                      issue with respect to the hormone therapy treatment and
                                      apparently failed to make this contention with respect to the
                                      SRS.
                                         Section 213(d)(9)(B) provides a potentially broad disallow-
                                      ance of expenses relating to procedures intended to improve
                                      a taxpayer’s appearance—a disallowance so broad that Con-
                                      gress provided exceptions set forth in section 213(d)(9)(A) to
                                      ensure that certain procedures which address deformities
                                      were deemed medical care. The parties have stipulated that
                                      petitioner’s procedures did not ameliorate a deformity. Even
                                      if SRS and the accompanying procedures fail to meet the defi-
                                      nition of ‘‘cosmetic surgery’’, it is arguable that these proce-
                                      dures are ‘‘similar’’ to cosmetic surgery, not ‘‘medical care’’,
                                      and thus not deductible.
                                      IV. Congressional Activity, Rather Than Respondent’s Litiga-
                                          tion Laxity, Should Determine Deductibility
                                        Apparently respondent, but not Congress, readily concedes
                                      that a procedure (i.e., directed at improving appearance but
                                      not meaningfully promoting proper bodily function) is
                                      excluded from the definition of cosmetic surgery if it treats




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00075   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           109


                                      a disease. In addition, respondent, but not Congress, appears
                                      to concede that if petitioner’s procedures fail to meet the defi-
                                      nition of cosmetic surgery, these procedures also fail to
                                      qualify as ‘‘similar procedures’’. See majority op. note 31. In
                                      short, respondent fails to adhere to the plain meaning of the
                                      statute. If respondent is comfortable, however, with his cur-
                                      rent interpretation of the statute and the accompanying liti-
                                      gating position, I offer a word of advice—‘‘Katy, bar the
                                      door!’’
                                        WELLS, VASQUEZ, KROUPA, and GUSTAFSON, JJ., agree
                                      with this concurring in part and dissenting in part opinion.



                                        GUSTAFSON, J., concurring in part and dissenting in part:
                                      I concur with the result of the majority opinion to the extent
                                      that it disallows a medical care deduction under section 213
                                      for breast enhancement surgery, but I dissent to the extent
                                      that the majority allows a deduction for genital sex reassign-
                                      ment surgery.
                                        Petitioner is the father of three children from a marriage
                                      that lasted 20 years. Although physically healthy, he was
                                      unhappy with his male anatomy and became profoundly so,
                                      to the point of contemplating self-mutilation. Mental health
                                      professionals diagnosed him as suffering from Gender
                                      Identity Disorder (GID). With their encouragement, he
                                      received medical procedures: In years before the year at issue
                                      here, he received injections of female hormones 1 and under-
                                      went facial surgery and other plastic surgery; and then in
                                      the year at issue he paid a surgeon about $20,000 to remove
                                      his genitals, fashion simulated female genitals, and insert
                                      breast implants. After these procedures, petitioner ‘‘passed’’
                                      as female and became happier. She 2 claimed an income tax
                                      deduction for the cost of this ‘‘sex reassignment surgery’’
                                      (SRS). The question in this case is whether section 213 allows
                                      this deduction.
                                         1 In the year at issue petitioner received $382 of hormone injections. The majority allows that

                                      deduction along with the deduction for genital sex reassignment surgery. I assume that the hor-
                                      mone injections are ‘‘similar’’ to cosmetic surgery and should therefore be disallowed under sec-
                                      tion 213(d)(9)(A), but I do not further address this de minimis deduction.
                                         2 Consistent with petitioner’s preference, I use feminine pronouns to refer to petitioner in her

                                      post-SRS state. However, this convention does not reflect a conclusion that petitioner’s sex has
                                      changed from male to female.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00076   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      110                134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      I. Non-issues
                                         The surgical procedures involved in this case are startling,
                                      and to avoid distraction from the actual issues, it is expe-
                                      dient to affirm what is not at issue here: Neither the tax col-
                                      lector nor the Tax Court sits as a board of medical review,
                                      as if it were reconsidering, validating, or overruling the med-
                                      ical profession’s judgments about what medical care is appro-
                                      priate or effective for what medical conditions. Likewise, nei-
                                      ther the tax collector nor the Tax Court passes judgment on
                                      the ethics of legal medical procedures, since otherwise
                                      deductible medical expenses are not rendered non-deductible
                                      on ethical grounds. See, e.g., Rev. Rul. 73–201, 1973–1 C.B.
                                      140 (cost of legal abortion held deductible under section 213).
                                         Rather, we decide only a question of deductibility for
                                      income tax purposes. In section 213 Congress created a
                                      deduction for ‘‘medical care’’, thereby implicitly but nec-
                                      essarily importing into the Internal Revenue Code principles
                                      that rely in part on the judgments of the medical profession.
                                      Medical care that is given pursuant to medical consensus
                                      might later prove to have been unfortunate or even disas-
                                      trous (such as thalidomide prescribed for morning sickness);
                                      but an eventual discovery that the care was ill advised would
                                      not affect the deductibility of that care for income tax pur-
                                      poses. To determine deductibility under section 213, we
                                      determine whether a procedure is ‘‘medical care’’ (as defined
                                      in that statute), not whether we would or would not endorse
                                      it as appropriate care. Neither the IRS nor the Tax Court was
                                      appointed to make such medical endorsements.
                                         Consequently, I accept the majority’s conclusions, based on
                                      expert medical testimony describing medical consensus, 3
                                      that GID is a serious mental condition, that petitioner suf-
                                      fered from it, that the medical consensus favors SRS for a GID
                                      patient like petitioner, that SRS usually relieves the patient’s
                                      suffering to some significant extent, and that SRS was pre-
                                      scribed to and performed on petitioner in accord with pre-
                                      vailing standards of medical care.
                                        3 The majority opinion acknowledges that in the psychiatric community there is a minority

                                      view that SRS is unethical and not medically necessary. Majority op. note 47 (citing testimony
                                      referring to Paul McHugh, ‘‘Surgical Sex’’, First Things (November 2004), http://
                                      www.firstthings.com/index.php (online edition)); majority op. p. 70; see also Holmes op. pts. I.B
                                      and II.B. However, if psychiatry has an intramural dispute about SRS, it will not be arbitrated
                                      by persons trained in tax law.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00077   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           111


                                         However, Congress did not cede to doctors the authority to
                                      grant tax deductions. As the majority acknowledges, majority
                                      op. p. 56, medical experts do not decide the interpretation of
                                      the terms in section 213. Rather, statutory interpretation is
                                      the domain of the courts. Although informed by medical
                                      opinion on the medical matters pertinent to medical exper-
                                      tise, the Court alone performs the judicial task of deter-
                                      mining the meaning of a statute and applying it to the facts
                                      of the case before us, on the basis of the record before us. My
                                      disagreement with the majority concerns the interpretation
                                      and application of section 213(d)(9), by which Congress delib-
                                      erately denied deductibility for ‘‘cosmetic surgery or other
                                      similar procedures’’.
                                      II. ‘‘[M]edical care’’, ‘‘cosmetic surgery’’, and ‘‘other similar
                                           procedures’’ in section 213
                                         As a general rule, ‘‘personal, living, or family expenses’’ are
                                      not deductible. Sec. 262. As an exception to that general rule,
                                      Congress enacted in 1942 a deduction for ‘‘expenses paid
                                      * * * for medical care’’, sec. 213(a); but in 1990 Congress
                                      carved out (and declared non-deductible) ‘‘cosmetic surgery or
                                      other similar procedures’’, sec. 213(d)(9). We decide today
                                      whether SRS is deductible ‘‘medical care’’ or instead is non-
                                      deductible ‘‘cosmetic surgery or other similar procedures’’.
                                      ‘‘Whether and to what extent deductions shall be allowed
                                      depends upon legislative grace; and only as there is clear
                                      provision therefor can any particular deduction be allowed.’’
                                      New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934)
                                      (emphasis added). This case therefore requires us to deter-
                                      mine whether there is ‘‘clear provision’’ for the deduction of
                                      SRS expenses. I conclude that section 213 is anything but
                                      clear in allowing such a deduction.
                                           A. The language of section 213
                                        The definition of deductible ‘‘medical care’’ in section
                                      213(d)(1)(A) and the definition of non-deductible ‘‘cosmetic
                                      surgery’’ in the exception in subsection (d)(9)(B) must be con-
                                      strued in tandem. The subsection reads in part as follows
                                      (emphasis added):
                                           SEC. 213(d). DEFINITIONS.—For purposes of this section—
                                             (1) The term ‘‘medical care’’ means amounts paid—




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00078   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      112                134 UNITED STATES TAX COURT REPORTS                                         (34)


                                              (A) for the diagnosis, cure, mitigation, treatment, or prevention of
                                            disease, or for the purpose of affecting any structure or function of the
                                            body * * *.

                                                                *   *     *  *    *   *   *
                                            (9) COSMETIC SURGERY.—
                                               (A) IN GENERAL.—The term ‘‘medical care’’ does not include cosmetic
                                            surgery or other similar procedures, unless the surgery or procedure
                                            is necessary to ameliorate a deformity arising from, or directly related
                                            to, a congenital abnormality, a personal injury resulting from an
                                            accident or trauma, or disfiguring disease.
                                               (B) COSMETIC SURGERY DEFINED.—For purposes of this paragraph,
                                            the term ‘‘cosmetic surgery’’ means any procedure which is directed at
                                            improving the patient’s appearance[4] and does not meaningfully pro-
                                            mote the proper function of the body or prevent or treat illness or dis-
                                            ease.

                                      Thus, in 1942 ‘‘medical care’’ was defined in subsection
                                      (d)(1)(A) with two alternative prongs—first, a list of five
                                      modes of care for disease, i.e., ‘‘diagnosis, cure, mitigation,
                                      treatment, or prevention’’; 5 and second, care that ‘‘affect[s]
                                      any structure or function of the body’’.
                                         4 Petitioner contends that SRS is not ‘‘directed at improving the patient’s appearance’’ for pur-

                                      poses of section 213(d)(9)(B); respondent contends that it is; and the majority concludes, majority
                                      op. note 30, that it ‘‘need not resolve’’ the issue. On this basis, however, Judge Goeke’s concur-
                                      rence would allow a deduction for the genital SRS because it ‘‘was not directed at improving
                                      petitioner’s appearance but rather was functional.’’ Goeke op. p. 101. His concurrence thus right-
                                      ly discerns that section 213(d)(9)(B) distinguishes ‘‘improving * * * appearance’’ from
                                      ‘‘promot[ing] * * * proper function’’ (emphasis added); but there is no basis for the conclusion
                                      that SRS is ‘‘functional’’. Petitioner’s SRS did not involve any attempt to confer female reproduc-
                                      tive function. No one undertaking to ‘‘promote’’ sexual ‘‘function’’ would perform a penectomy
                                      and a castration on a healthy male body. On the contrary, SRS drastically terminates a male
                                      patient’s functioning sexuality. SRS did not change petitioner into a ‘‘function[ing]’’ female, but
                                      removed his salient male characteristics and attempted to make him resemble a woman—i.e.,
                                      by petitioner’s lights, to ‘‘improve[ ] the patient’s appearance’’. The majority shows that the SRS
                                      surgeon does try to salvage, as much as possible, some possibility for subsequent sexual re-
                                      sponse, majority op. p. 41, and observes that SRS ‘‘alter[s] appearance (and, to some degree,
                                      function)’’, majority op. p. 70 (emphasis added); but the majority makes no finding that peti-
                                      tioner proved that any identifiable portion of the SRS expense can be allocated to restoration
                                      of ‘‘function’’. On our record, petitioner’s SRS must be said to have been directed at improving
                                      appearance rather than promoting function, and it is therefore within the definition of ‘‘cosmetic
                                      surgery’’. Judge Holmes’s concurrence, on the other hand, attempts no analysis of function
                                      versus appearance, but rather proposes a different distinction not explicit in the statute: He
                                      would hold that SRS did not ‘‘so much improve [petitioner’s male] appearance as create a new
                                      [female] one.’’ Holmes op. p. 99 (emphasis added). This ingenious distinction, if accepted, might
                                      well undo the disallowance of deductions for cosmetic surgery, since plastic surgery is often mar-
                                      keted and purchased on the grounds that it supposedly creates a ‘‘new appearance’’. But in fact,
                                      any surgery that gives the patient a ‘‘new appearance’’ has thereby ‘‘improved’’ the patient’s
                                      former appearance and is ‘‘cosmetic surgery’’ under section 213(d)(9)(B).
                                         5 The five terms employed to define ‘‘medical care’’ for income tax purposes in 1942 were bor-

                                      rowed from the definitions of ‘‘drug’’ and ‘‘device’’ added in 1938 to the Federal Trade Commis-
                                      sion Act by the Federal Trade Commission Act amendments of 1938, ch. 49, sec. 4, 52 Stat. 114,
                                      currently codified at 15 U.S.C. sec. 55(c), (d)(2) (2006). The same five terms currently appear
                                      in virtually identical definitions of ‘‘medical care’’ in 29 U.S.C. sec. 1191b(a)(2)(A) (2006) (for




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00079   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                               113


                                         In 1990 the concepts of both these prongs were narrowed
                                      in subsection (d)(9)(B) for the purpose of creating a limited
                                      exception to the new disallowance of ‘‘cosmetic surgery or
                                      other similar procedures’’. That is, appearance-improving
                                      procedures were declared to be non-deductible ‘‘cosmetic sur-
                                      gery’’, but the definition given for that term provides a two-
                                      prong exception: These appearance-improving procedures are
                                      nonetheless deductible under (d)(9)(B) (i.e., are not ‘‘cosmetic
                                      surgery’’) if they ‘‘meaningfully promote the proper function
                                      of the body’’ (i.e., not if they ‘‘affect[ ] any structure or func-
                                      tion of the body’’, as more broadly allowed in (d)(1)(A)) and
                                      are nonetheless deductible under (d)(9)(B) if they ‘‘prevent or
                                      treat’’ disease (i.e., not if they provide ‘‘diagnosis, cure, miti-
                                      gation, treatment, or prevention of disease’’, as more broadly
                                      allowed in (d)(1)(A)).
                                         Two features of this statutory language that are virtually
                                      overlooked in the majority opinion should be noted: First,
                                      section 213(d)(9)(A) disallows deductions for ‘‘cosmetic sur-
                                      gery or other similar procedures’’. (Emphasis added.) That is,
                                      expenses for a procedure that falls outside ‘‘cosmetic surgery’’
                                      (as defined in subsection (d)(9)(B)) may still be disallowed if
                                      the procedure is ‘‘similar’’ to ‘‘cosmetic surgery’’. Congress
                                      thus enacted this disallowance in such a way that splitting
                                      hairs in order to find a procedure not to be within the spe-
                                      cific definition of ‘‘cosmetic surgery’’ in (d)(9)(B) may not and
                                      should not save the day for its deductibility. Rather, deduct-
                                      ibility must be denied under (d)(9)(A) if the non-‘‘cosmetic
                                      surgery’’ procedure is nonetheless ‘‘similar’’ to cosmetic sur-
                                      gery.
                                         Second, assuming that subsection (d)(9)(B) permits deduct-
                                      ibility if not both but only one of its prongs is satisfied (i.e.,
                                      if a procedure only ‘‘prevent[s] or treat[s]’’), 6 it must be noted
                                      purposes of group health plans under ERISA) and 42 U.S.C. sec. 300gg–91(a)(2) (2006) (for pur-
                                      poses of requirements relating to health insurance coverage). They also appear in definitions of
                                      ‘‘drug’’ and ‘‘device’’ in 21 U.S.C. sec. 321(g)(1)(B) and (h)(2) (2006) and in the definitions of
                                      ‘‘radiologic procedure’’ and ‘‘radiologic equipment’’ in 42 U.S.C. sec. 10003(2) and (3) (2006). They
                                      appear in their verb forms in 42 U.S.C. sec. 247d–6d(i)(7)(A) (2006) (defining ‘‘qualified pan-
                                      demic or epidemic product’’) and 21 U.S.C. sec. 343(r)(6) (2006) (restricting statements about die-
                                      tary supplements). They appear as adjectives and gerunds, along with ‘‘therapeutic’’ and ‘‘reha-
                                      bilitative’’, in 26 U.S.C. sec. 7702B(c)(1) (defining ‘‘qualified long-term care services’’). Thus, this
                                      fivefold list is not unique to the Internal Revenue Code.
                                         6 The majority (like the parties) interprets subsection (d)(9)(B) to permit deductibility if a pro-

                                      cedure does not ‘‘meaningfully promote’’ but does ‘‘prevent or treat’’; and the majority evaluates
                                      the expenses only under that second prong, to determine whether the procedures at issue here
                                                                                                         Continued




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00080   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134      SHEILA
                                      114                134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      that this second prong in subsection (d)(9)(B) has only two
                                      terms—‘‘prevent’’ and ‘‘treat’’—from among the list of five
                                      possible modes of ‘‘medical care’’ in subsection (d)(1)(A). I
                                      now turn to the significance of that wording.
                                           B. The different terminology of subsections (d)(1)(A) and
                                              (d)(9)(B)
                                        As is noted above, ‘‘medical care’’ is defined in subsection
                                      (d)(1)(A) by five terms—i.e., ‘‘diagnosis, cure, mitigation,
                                      treatment, or prevention’’. Some of these terms do have some
                                      overlapping shades of meaning, and it seems likely that
                                      when this ‘‘medical care’’ deduction was first enacted in 1942,
                                      Congress simply intended to enact a broad definition of med-
                                      ical care and therefore chose terms to convey that breadth,
                                      without particular intention about the potential distinctive
                                      meanings of those terms. The distinctive meanings would
                                      have been irrelevant under the general provision that
                                      allowed the deduction if any of these modes of care was pro-
                                      vided. That is, if a medical procedure was a ‘‘treatment’’ but
                                      not a ‘‘mitigation’’, or was a ‘‘mitigation’’ but not a ‘‘treat-
                                      ment’’, the expense would be deductible nonetheless under
                                      section 213(d)(1)(A).
                                        However, we consider here the very different and specific
                                      congressional intent 48 years later in 1990, when Congress
                                      enacted subsection (d)(9) to disallow deductions for cosmetic
                                      surgery. Congress provided an exception to this new dis-
                                      allowance, and allowed a deduction in the case of an other-
                                      wise cosmetic procedure, if it ‘‘prevent[s] or treat[s] illness or
                                      disease’’. Sec. 213(d)(9)(B) (emphasis added). According to
                                      this subsection, an otherwise cosmetic procedure will yield a
                                      deduction if it ‘‘prevent[s] or treat[s]’’ disease—i.e., two
                                      modes of care. Missing from this short list of deductible
                                      modes of care in subsection (d)(9)(B), as we have already
                                      noted, are three of the five terms in subsection (d)(1)(A),
                                      including ‘‘mitigation’’. The 1990 Congress was thus under-
                                      do ‘‘treat’’ disease. But see the opinion of Judge Foley, interpreting the definition in subsection
                                      (d)(9)(B) to disallow deductions for appearance-improving procedures unless a procedure both
                                      ‘‘meaningfully promote[s] the proper function of the body’’ and ‘‘prevent[s] or treat[s]’’ disease.
                                      The majority does not undertake to demonstrate that SRS ‘‘meaningfully promote[s] the proper
                                      function of the body’’, and if the statute requires that both prongs be satisfied, then SRS must
                                      therefore be non-deductible. In this partial dissent, however, I assume arguendo that only one
                                      prong need be satisfied; and I show that even so, contrary to the majority’s conclusion, SRS does
                                      not ‘‘prevent or treat’’ GID and therefore cannot be deductible even under the majority’s one-
                                      prong analysis.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00081   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                     O’DONNABHAIN v. COMMISSIONER                                                115


                                      taking to provide a limited exception to its new disallowance,
                                      and in so doing it was selective in choosing from the vocabu-
                                      lary at hand. Under the wording Congress adopted, if an
                                      otherwise cosmetic procedure ‘‘mitigates’’ a disease but
                                      cannot be said to ‘‘treat’’ or ‘‘prevent’’ it, then under the plain
                                      terms of the statute, one would have to conclude that the
                                      expense of that procedure is non-deductible.
                                        Congress provided that, to be deductible, an otherwise cos-
                                      metic procedure must ‘‘prevent or treat’’ a disease. Petitioner
                                      did not argue (and the majority does not hold) that SRS ‘‘pre-
                                      vents’’ GID (rather, SRS is offered only to persons who already
                                      suffer from the disorder, for whom ‘‘prevention’’ would come
                                      too late); so the contention must be that SRS ‘‘treats’’ GID.
                                      III. The meaning of ‘‘treat’’ in section 213(d)(9)(B)
                                         The majority implicitly holds that ‘‘prevent or treat’’ in sec-
                                      tion 213(d)(9)(A) is equivalent to, or is shorthand for,
                                      ‘‘diagnos[e], cure, mitigat[e], treat[ ], or prevent[ ]’’ in sub-
                                      section (d)(1)(A) and that no narrow meaning should be
                                      ascribed to ‘‘treat’’. Admittedly, it is possible to use the word
                                      ‘‘treat’’ in a loose manner that could include merely amelio-
                                      rating the effects of a disease. In that loose sense, one could
                                      say that SRS ‘‘treats’’ GID by mitigating the unhappiness of
                                      the sufferer. ‘‘Treatment’’ and ‘‘mitigation’’ do appear side by
                                      side as modes of ‘‘care’’ in (d)(1)(A), reflecting different
                                      shades of meaning of the more general word ‘‘care’’; and thus
                                      to some extent they are synonymous. If they were such close
                                      synonyms as to be equivalent in meaning (or if ‘‘treat’’
                                      included ‘‘mitigate’’ 7), then the absence of ‘‘mitigate’’ in
                                      (d)(9)(B) would not be significant. However, ascribing this
                                      broad or loose meaning to ‘‘treat * * * disease’’ is untenable
                                      under section 213, where ‘‘treat’’ must be distinguished from
                                      ‘‘mitigate’’, and where the direct object is ‘‘disease’’ (not
                                      ‘‘patient’’ or ‘‘symptom’’), as I now show.




                                         7 By way of comparison, the absence of ‘‘cure’’ from section 213(d)(9)(B) is apparently not sig-

                                      nificant, because of the relationship of ‘‘treat’’ and ‘‘cure’’. ‘‘Treat’’ is a broader word that includes
                                      ‘‘cure’’. That is, although not everything that ‘‘treats’’ a disease undertakes to ‘‘cure’’ it, any pro-
                                      cedure that does ‘‘cure’’ a disease necessarily ‘‘treats’’ it.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00082    Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134       SHEILA
                                      116                134 UNITED STATES TAX COURT REPORTS                                         (34)


                                           A. To yield a deduction, an appearance-improving proce-
                                              dure must ‘‘treat’’ disease (as opposed to effecting
                                              ‘‘mitigation’’).
                                         Subsection (d)(9)(B) does not provide that appearance-
                                      improving procedures are deductible if they ‘‘prevent, treat,
                                      or mitigate’’ a disease, but rather if they ‘‘prevent or treat’’
                                      disease. The majority’s leading definition of ‘‘treat’’, majority
                                      op. p. 65, taken from Webster’s New Universal Unabridged
                                      Dictionary (2003), is ‘‘to deal with (a disease, patient, etc.) in
                                      order to relieve or cure’’; and the same dictionary’s definition
                                      of ‘‘mitigate’’ is—
                                      1. to lessen in force or intensity, as wrath, grief, harshness, or pain; mod-
                                      erate. 2. to make less severe * * *. 3. to make (a person, one’s state of
                                      mind, disposition, etc.) milder or more gentle; mollify; appease.

                                      A usage note observes that the ‘‘central meaning [of ‘‘miti-
                                      gate’’] is ‘to lessen’ or ‘make less severe’ ’’. Thus, the two
                                      words ‘‘treat’’ and ‘‘mitigate’’ are by no means identical.
                                         Consequently, a question directed toward ‘‘treatment’’ of a
                                      disease may ask (using language from Webster’s): Did the
                                      procedure ‘‘deal with’’ the disease? Or it may ask (using lan-
                                      guage from Havey v. Commissioner, 12 T.C. 409, 412 (1949)
                                      (emphasis added)): ‘‘[D]id the treatment bear directly on the
                                      * * * condition in question’’? But a question about ‘‘mitiga-
                                      tion’’ may ask (using language from Webster’s): Did the
                                      procedure ‘‘make [the disease] less severe’’ or ‘‘lessen * * *
                                      pain’’? And a comment that is framed in terms of ‘‘mitiga-
                                      tion’’ may speak of ‘‘mitigation of the effects of his injury and
                                      disability’’. Pols v. Commissioner, T.C. Memo. 1965–222, 24
                                      T.C.M. (CCH) 1140 (1965) (emphasis added). Our Opinion in
                                      Starrett v. Commissioner, 41 T.C. 877, 881 (1964), includes
                                      such usage of both these terms. In Starrett we held that psy-
                                      chiatric expenses were ‘‘clearly ‘amounts paid for the diag-
                                      nosis, cure, mitigation, treatment,’ and ‘prevention’ of a spe-
                                      cific ‘disease’ ’’; and we upheld the taxpayer’s argument that
                                      he underwent psychoanalysis—
                                      for the diagnosis of his emotional condition, cure of a specific emotional
                                      disease classified as anxiety reaction, mitigation of the effects upon him of
                                      such disease, treatment of the underlying causes of his anxiety reaction,
                                      and thereby the prevention of further suffering therefrom * * *. [Id.;
                                      emphasis added.]




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00083   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           117


                                      When ‘‘treat’’ and ‘‘mitigate’’ are distinguished, rather than
                                      being blended, ‘‘treatment’’ addresses underlying causes and
                                      ‘‘mitigation’’ lessens effects. I conclude that this distinction
                                      between ‘‘treat’’ and ‘‘mitigate’’ is critical to determining
                                      whether SRS ‘‘treats’’ GID, so as to render SRS expenses
                                      deductible.
                                           B. To yield a deduction, an appearance-improving proce-
                                              dure must treat ‘‘disease’’ (as opposed to treating a
                                              patient or a symptom).
                                         If the parties and the majority have in effect defined
                                      ‘‘treat’’ so broadly as to nearly encompass ‘‘mitigate’’, they
                                      may have done so by overlooking the fact that, in section
                                      213(d)(9)(B), the object of the verb ‘‘treat’’ is ‘‘disease’’. The
                                      breadth of the dictionary definitions cited by the majority,
                                      majority op. p. 65, is attributable in part to the fact that one
                                      may ‘‘treat’’ a disease, or a patient, or a symptom. Con-
                                      sequently, a general definition of ‘‘treat’’ that is not con-
                                      fined—as section 213 is confined—to treatment of a disease
                                      should and will reflect shades of meaning appropriate for
                                      treatment of symptoms, which shades of meaning overlap
                                      more with ‘‘mitigate’’. For that reason these general dic-
                                      tionary definitions are not very illuminating in this instance,
                                      where the question is whether to ‘‘treat’’ disease is or is not
                                      the same as to ‘‘mitigate’’ disease.
                                         As a part of ‘‘medical care’’, one could ‘‘treat’’ a patient with
                                      palliative care or could ‘‘treat’’ his painful symptoms with
                                      morphine (both of which could also be said to ‘‘mitigate’’, and
                                      the expenses of which would be deductible under section
                                      213(a))—all the while leaving his disease un-‘‘treated’’,
                                      strictly speaking. When Congress intends to enact a provi-
                                      sion that turns on ‘‘treatment of patients’’ 8 or on ‘‘treatment
                                      of symptoms’’, 9 it knows how to do so; but it did not do so
                                        8 See sec. 168(i)(2)(C) (emphasis added); see also sec. 5214(a)(3)(D); 10 U.S.C. sec. 1077 (2006);

                                      21 U.S.C. sec. 802 (2006); 22 U.S.C. sec. 2151b–3 (2006); 24 U.S.C. sec. 225g (2006); 38 U.S.C.
                                      secs. 1706, 1718, 7332 (2006); 42 U.S.C. secs. 238b, 256e, 280e, 280g–6, 280h–3, 290dd–2, 291o,
                                      300d–41, 1320b–8 (2006).
                                        9 See 8 U.S.C. sec. 1611(b)(1)(C) (2006) (emphasis added); see also 8 U.S.C. secs. 1613, 1621,

                                      1632 (2006); 42 U.S.C. secs. 285o–4(d), 300cc–3, 1395i–3, 1396r (2006). Focusing on treatment
                                      of symptoms, Judge Halpern emphasizes, Halpern op. p. 79 (emphasis added), that petitioner’s
                                      expert pronounced petitioner ‘‘cured’’ (even though petitioner’s belief about her sex was un-
                                      changed) in the sense that ‘‘the symptoms of the disorder were no longer present’’, e.g., ‘‘she had
                                      been free for a long time of clinically significant distress or impairment’’; and Judge Halpern
                                                                                                     Continued




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00084   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      118                134 UNITED STATES TAX COURT REPORTS                                          (34)


                                      in section 213(d)(9)(B), which allows deductions for proce-
                                      dures that ‘‘treat * * * disease’’. (Emphasis added.) If a
                                      procedure is said to ‘‘treat * * * disease’’, then ‘‘the treat-
                                      ment [will] bear directly on the * * * condition in question’’,
                                      Havey v. Commissioner, supra at 412, or will ‘‘deal with’’ the
                                      disease (as in Webster’s). Other medical care may be ‘‘mitiga-
                                      tion’’, but not ‘‘treatment’’.
                                         In defining ‘‘cosmetic surgery’’, Congress aimed to deny
                                      deductions that had previously been allowed. If in the
                                      amended statute Congress had allowed deductions for
                                      appearance-improving procedures that ‘‘prevent, treat, or
                                      mitigate’’ a disease, then that broader exception might have
                                      undermined the intended limiting effect of the new disallow-
                                      ance. The majority’s loose interpretation of subsection
                                      (d)(9)(B) treats the statute as if Congress had enacted that
                                      imaginary broader exception, and its loose interpretation
                                      invites arguments for the deduction not only of GID patients’
                                      SRS expenses but also of the cosmetic surgery expenses of any
                                      psychiatric patient who is (or claims to be) pathologically
                                      unhappy with his body. 10 In any event, Congress did not pro-
                                      vide that an appearance-improving procedure will nonethe-
                                      less be deductible if it merely ‘‘mitigates’’ a disease.




                                      equates a removal of symptoms with a ‘‘cure’’ of the disease (and therefore a ‘‘treatment’’ of the
                                      disease), Halpern op. pp. 79–80. However, when treatment of symptoms makes a psychiatric pa-
                                      tient content with his delusion, he has not been cured, and his ‘‘disease’’ has not been ‘‘treat[ed]’’
                                      for purposes of section 213(d)(9)(B).
                                         10 See Diagnostic and Statistical Manual of Mental Disorders 576–582 (Body Dysmorphic Dis-

                                      order (BDD)) (4th ed., text revision 2000) (DSM–IV–TR): ‘‘The essential feature of Body
                                      Dysmorphic Disorder (historically known as dysmorphophobia) is a preoccupation with a defect
                                      in appearance * * *. The defect is either imagined, or, if a slight physical anomaly is present,
                                      the individual’s concern is markedly excessive * * *. The preoccupation must cause significant
                                      distress or impairment in social, occupational, or other important areas of functioning’’. The
                                      entry for BDD in DSM–IV–TR is not in the record; but the majority refers to ‘‘DSM–IV–TR,
                                      which all three experts agree is the primary diagnostic tool of American psychiatry’’, majority
                                      op. p. 60, and states that the U.S. Supreme Court has relied on a listing in the DSM in treating
                                      something as a ‘‘serious medical condition’’, majority op. note 40; and I take judicial notice of
                                      the BDD entry. See, e.g., United States v. Long, 562 F.3d 325, 334–335 & n.22 (5th Cir. 2009);
                                      United States v. Johnson, 979 F.2d 396, 401 (6th Cir. 1992). Whether BDD is a ‘‘disease’’ and
                                      whether cosmetic surgery purportedly prescribed for it could be ‘‘treat[ment]’’ under section
                                      213(d)(9)(B) are questions yet to be litigated—if the majority’s broad interpretation of section
                                      213(d)(9)(B) prevails.




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00085   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134    SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           119


                                           C. A looser interpretation of ‘‘treat * * * disease’’ is not
                                              warranted in section 213(d)(9)(B).
                                           1. The structure of subsection (d)(9)(B) shows deliberate
                                              restriction in its terminology.
                                         Congress enacted section 213(d)(9) to restrict medical care
                                      deductions by explicitly denying such deductions for cosmetic
                                      surgery and similar procedures. Its terms must be under-
                                      stood by reference to that announced purpose. Consistent
                                      with that purpose, subsection (d)(9)(B) reflects, as I have
                                      shown, a narrowing of both prongs of the subsection (d)(1)(A)
                                      definition of ‘‘medical care’’—i.e., subsection (d)(1)(A)’s
                                      ‘‘affect[ ] any structure or function of the body’’ was narrowed
                                      to become ‘‘meaningfully promote the proper function of the
                                      body’’ in (d)(9)(B); and subsection (d)(1)(A)’s ‘‘diagnosis, cure,
                                      mitigation, treatment, or prevention of disease’’ was nar-
                                      rowed to become ‘‘prevent or treat’’ disease in (d)(9)(B).
                                      Where Congress was explicitly setting out to shut down
                                      deductions for cosmetic surgery, the restricting language it
                                      employed can hardly be taken as careless or unintentional.
                                           2. The stricter interpretation of subsection (d)(9)(B) is con-
                                              sistent with (d)(9)(A).
                                         Because the particular question in this case is whether SRS
                                      falls within the definition of cosmetic surgery for which
                                      expenses are disallowed in subsection (d)(9)(B), the majority
                                      gives short shrift to subsection (d)(9)(A). Subsection (d)(9)(A)
                                      shows the sorts of exceptional procedures for which Congress
                                      meant to preserve deductions—i.e., procedures that are ‘‘nec-
                                      essary to ameliorate a deformity arising from, or directly
                                      related to, a congenital abnormality, a personal injury
                                      resulting from an accident or trauma, or disfiguring dis-
                                      ease’’—and thus illuminates the congressional purpose.
                                      Someone like petitioner who suffers from GID has no deformi-
                                      ties that are addressed by SRS; he has no ‘‘congenital abnor-
                                      mality’’; he has suffered no ‘‘accident or trauma, or dis-
                                      figuring disease.’’ There is thus no indication that Congress
                                      explicitly intended to carve out, from its new disallowance,
                                      an exception that would reach SRS expenses. The wording
                                      choices in the statute that limit deductibility must be taken




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00086   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      120                134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      at face value in order to vindicate the undisputed congres-
                                      sional purpose.
                                         The majority not only ignores those implications of sub-
                                      section (d)(9)(A) for the purpose of the statute but also ren-
                                      ders much of (d)(9)(A) surplusage by its unduly loose
                                      interpretation of subsection (d)(9)(B). Subsection (d)(9)(A)
                                      provides that even if a procedure is ‘‘cosmetic surgery’’ (as
                                      defined in (d)(9)(B)), its expenses will be deductible if (inter
                                      alia) the procedure ‘‘ameliorate[s] a deformity arising from,
                                      or directly related to, * * * disfiguring disease.’’ However, if
                                      surgical procedures that mitigate the effects of disease
                                      thereby fall outside the definition of ‘‘cosmetic surgery’’ (i.e.,
                                      because they are deemed to ‘‘treat disease’’ in the broad
                                      sense), then subsection (d)(9)(A) would describe an empty set
                                      when it refers to ‘‘cosmetic surgery’’ that ‘‘ameliorate[s] a
                                      deformity arising from * * * disfiguring disease.’’ If the
                                      procedure ‘‘ameliorate[s]’’, and if to ameliorate is to ‘‘treat’’,
                                      then the procedure would not be ‘‘cosmetic surgery’’ in the
                                      first place. Anything that ‘‘ameliorates’’ would be deductible
                                      because of the definition in (d)(9)(B), and the allowance in
                                      (d)(9)(A) would have no effect.
                                         On the other hand, if ‘‘treat * * * disease’’ in subsection
                                      (d)(9)(B) is given its precise meaning (not excluding from
                                      ‘‘cosmetic surgery’’ a procedure that only mitigates the effects
                                      of disease), then (d)(9)(A) would operate to allow a deduction
                                      for cosmetic surgery that does not ‘‘treat’’ a disfiguring dis-
                                      ease but rather ameliorates deformities arising from it. Thus,
                                      only the precise meaning of ‘‘treat disease’’ in (d)(9)(B) har-
                                      monizes with the allowance in (d)(9)(A).
                                           3. Broader usage of the word ‘‘treat’’ by doctors does not
                                              affect its significance in section 213(d)(9)(B).
                                         It appears that doctors sometimes use the word ‘‘treat’’ in
                                      this loose sense, so that they discuss SRS as a ‘‘treatment’’ for
                                      GID. See majority op. pt. III.D.1. However, as the majority
                                      indicates, majority op. p. 56, the meaning of statutory terms
                                      is within the judicial province, and we do not generally
                                      accept expert opinion on the meaning of statutory terms. In
                                      testimony in this case, doctors manifestly used the terms
                                      ‘‘care’’ and ‘‘treatment’’ almost interchangeably, without par-
                                      ticular attention to whether it is the patient, the symptoms,




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00087   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      (34)                    O’DONNABHAIN v. COMMISSIONER                                           121


                                      or the disease that is being addressed; in section 213(d), how-
                                      ever, ‘‘care’’ is a general term of which ‘‘treatment’’ is a mode
                                      distinct from ‘‘mitigation’’, and deductible care is directed to
                                      ‘‘disease’’ (or ‘‘illness’’), not to the patient or her symptoms.
                                      There is thus no indication that doctors’ usage of these words
                                      respects the distinctions that are important in section 213.
                                         With the foregoing understanding of the purpose and oper-
                                      ation of section 213(d)(9), I now address the question
                                      whether SRS ‘‘treats’’ GID.
                                      IV. SRS does not ‘‘treat’’ GID for purposes of section
                                          213(d)(9)(B).
                                         For the GID patient there is a dissonance between, on the
                                      one hand, his male body (i.e., his male facial appearance, his
                                      male body hair, his male body shape, his male genitalia, his
                                      male endocrinology, and the Y chromosomes in the cells of
                                      his body) and, on the other hand, his perception of himself
                                      as female. The male body conflicts with the female self-
                                      perception and produces extreme stress, anxiety, and
                                      unhappiness.
                                         One could analyze the GID patient’s problem in one of two
                                      ways: (1) His anatomical maleness is normative, and his per-
                                      ceived femaleness is the problem. Or (2) his perceived
                                      femaleness is normative, and his anatomical maleness is the
                                      problem. If one assumes option 2, then one could say that
                                      SRS does ‘‘treat’’ his GID by bringing his problematic male
                                      body into simulated conformity (as much as is possible) with
                                      his authentic female mind.
                                         However, the medical consensus as described in the record
                                      of this case is in stark opposition to the latter characteriza-
                                      tion and can be reconciled only with option 1: Petitioner’s
                                      male body was healthy, and his mind was disordered in its
                                      female self-perception. GID is in the jurisdiction of the psy-
                                      chiatric profession—the doctors of the mind—and is listed in
                                      that profession’s definitive catalog of ‘‘Mental Disorders’’. See
                                      DSM–IV–TR at 576–582. When a patient presents with a
                                      healthy male body and a professed subjective sense of being
                                      female, the medical profession does not treat his body as an
                                      anomaly, as if it were infected by the disease of an alien
                                      maleness. Rather, his male body is taken as a given, and the
                                      patient becomes a psychiatric patient because of his dis-




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00088   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
                                      122                134 UNITED STATES TAX COURT REPORTS                                         (34)


                                      ordered feeling that he is female. The majority concludes,
                                      majority op. p. 76 (emphasis added), that GID is a ‘‘serious
                                      mental disorder’’—i.e., a disease in petitioner’s mind—and I
                                      accept that conclusion.
                                         A procedure that changes the patient’s healthy male body
                                      (in fact, that disables his healthy male body) and leaves his
                                      mind unchanged (i.e., with the continuing misperception that
                                      he is female) has not treated his mental disease. On the con-
                                      trary, that procedure has given up on the mental disease,
                                      has capitulated to the mental disease, has arguably even
                                      changed sides and joined forces with the mental disease. In
                                      any event, the procedure did not (in the words of Havey v.
                                      Commissioner, 12 T.C. at 412) ‘‘bear directly on the * * *
                                      condition in question’’, did not ‘‘deal with’’ the disease (per
                                      Webster’s), did not ‘‘treat’’ the mental disease that the thera-
                                      pist diagnosed. Rather, the procedure changed only peti-
                                      tioner’s healthy body and undertook to ‘‘mitigat[e]’’ the
                                      effects of the mental disease.
                                         Even if SRS is medically indicated for the GID patient—even
                                      if SRS is the best that medicine can do for him—it is an
                                      otherwise cosmetic procedure that does not ‘‘treat’’ the
                                      mental disease. Sex reassignment surgery is therefore within
                                      ‘‘cosmetic surgery or other similar procedures’’ under section
                                      213(d)(9)(A), and the expense that petitioner incurred for
                                      that surgery is not deductible under section 213(a).
                                         WELLS, FOLEY, VASQUEZ, and KROUPA, JJ., agree with this
                                      concurring in part and dissenting in part opinion.

                                                                               f




VerDate 0ct 09 2002   13:27 May 23, 2013   Jkt 372897   PO 20009   Frm 00089   Fmt 3851   Sfmt 3851   V:\FILES\ODONNA.134   SHEILA
