Respondent determined a deficiency of $5,679 in petitioner's Federal income tax for 2001. After concessions,
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 Circuit.
I. Petitioner's Background
Rhiannon G. O'Donnabhain (petitioner) was born a genetic male with unambiguous male genitalia. However, she
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.
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 investigating referrals, petitioner contacted Diane Ellaborn (Ms. Ellaborn), a licensed independent clinical social worker (LICSW) and psychotherapist, and commenced psychotherapy sessions in August 1996.
Although not a medical doctor, Ms. Ellaborn had a master's degree in social work and as an LICSW was authorized under Massachusetts law to diagnose and treat psychiatric illnesses. She had specialized training in the diagnosis and treatment of gender-related disorders.
During petitioner's psychotherapy Ms. Ellaborn learned of petitioner's cross-dressing history and of her longstanding 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 petitioner 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 Psychiatric 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 anatomical sex, including a preoccupation with getting rid of primary or secondary sex characteristics; (3) an absence of any physical intersex (hermaphroditic) condition; and (4) clinically significant distress or impairment in social, occupational, or other important areas of functioning as a result of the discomfort arising from the perceived incongruence between anatomical sex and perceived gender identity.
Both the DSM-IV-TR and its predecessor the DSM-IV contain the following "Cautionary Statement":
III. Treatment of GID
The World Professional Association for Transgender Health (WPATH), formerly known as the Harry Benjamin International Gender Dysphoria Association, Inc., is an association of medical, surgical, and mental health professionals specializing in the understanding and treatment of GID.
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;
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.
The Benjamin standards state that hormonal sex reassignment should precede surgical sex reassignment because the patient's degree of satisfaction with hormone therapy "may indicate or contraindicate later surgical sex reassignment."
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.
A. Petitioner's Hormone Treatments
In February 1997 Ms. Ellaborn referred petitioner to an endocrinologist for feminizing hormone therapy, and petitioner commenced taking hormones in September 1997.
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.
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
C. Petitioner's Sex Reassignment Surgery
Petitioner's anxiety as a result of having male genitalia persisted,
After three additional therapy sessions with petitioner in mid-2001, Ms. Ellaborn concluded that petitioner had satisfied or exceeded all of the Benjamin standards' criteria for sex reassignment surgery, including time spent satisfactorily on feminizing hormones and in the "real-life" experience. In July 2001 Ms. Ellaborn wrote a second letter to Dr. Meltzer certifying petitioner's GID diagnosis and satisfaction of the
Petitioner, anticipating the formal recommendations for her surgery, went for a consultation and examination by Dr. Meltzer in June 2001 at his offices in Portland, Oregon. Dr. Meltzer concluded that petitioner was a good candidate for sex reassignment surgery. Dr. Meltzer's notes of his physical examination of petitioner state: "Examination of her breasts reveal [sic] approximately B cup breasts with a very nice shape."
In mid-October 2001 petitioner returned to Portland, and she underwent sex reassignment surgery on October 19, 2001. The procedures that Dr. Meltzer carried out included surgical removal of the penis and testicles and creation of a vaginal space using genital skin and tissue. The procedures were designed to surgically reconfigure petitioner's male genitalia to create female genitalia both in appearance and in function, by reconstructing the penile glans into a neo-clitoris, making sexual arousal and intercourse possible.
Dr. Meltzer also performed breast augmentation surgery designed to make petitioner's breasts, which had experienced some development as a result of feminizing hormones, more closely resemble the breasts of a genetic female.
In May 2002 Dr. Meltzer performed followup surgery on petitioner to refine the appearance of her genitals and remove scar tissue. In February 2005 Dr. Meltzer performed further surgery on petitioner's face, designed to feminize her facial features.
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
On her Federal income tax return for 2001, petitioner claimed an itemized deduction for the foregoing expenditures as medical expenses, which respondent subsequently disallowed in a notice of deficiency.
VI. Expert 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 mainstream psychiatry that GID is a legitimate mental disorder. Dr. Brown indicates that there are no biological or laboratory
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" convincingly in public as female—that is, to be perceived as female by members of the public. Failure to pass exacerbates the anxieties associated with GID. Passing includes the use of 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 appearance, in view of the social stigma (including rejection by family and employment discrimination) and the pain and complications typically associated with such surgery. Moreover, Dr. Brown observes, normal genetic males generally do not desire to have their penis and testicles removed. Such a desire is regarded in the psychiatric literature as a likely manifestation of psychosis (usually schizophrenia) or GID, followed by a range of other less likely explanations. In Dr. Brown's opinion, people undergo sex reassignment surgery because of the severity of their GID symptoms and the lack of any other known effective treatment.
In Dr. Brown's view, the scientific literature demonstrates positive therapeutic outcomes from sex reassignment surgery.
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 appropriate 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 psychiatry 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 identified for which he was a listed author, and he has never written a chapter on the subject in a medical reference text.
In his expert report, Dr. Schmidt asserts that the validity of the GID diagnosis remains the subject of debate within the psychiatric profession and that he currently is undecided about its validity.
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 malpractice. Dr. Schmidt further believes that the Benjamin standards enjoy only limited acceptance in American medicine generally. He is unaware, however, of any significant disagreement with the Benjamin standards within the psychiatric profession, other 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 reassignment. All GID patients at the sexual disorders clinic where Dr. Schmidt practices are advised to become familiar with the Benjamin standards of care.
Dr. Schmidt believes that cross-gender hormone therapy and sex reassignment surgery have recognized medical and psychiatric benefits for persons suffering from GID, including reinforcement of an internal sense of consistency and balance in their gender identity. Dr. Schmidt has also expressed the view that once a genetic male with GID makes the decision to transition to a female identity, everything that reinforces the identity is helpful for psychological well-being. However, in his opinion a therapist should remain neutral regarding whether a patient should undergo hormone therapy or the
Given his view that failure to adhere to the Benjamin standards of care would not constitute malpractice and that a therapist should remain neutral regarding the administration of hormone therapy or sex reassignment surgery, Dr. Schmidt concludes that the procedures are elective and not medically necessary. He acknowledges, however, that the issue of the medical necessity of sex reassignment surgery is "contentious and variable within American medicine."
Finally, while noting that there is some evidence that GID may have a neurological cause, Dr. Schmidt believes that there is no conclusive scientific proof that GID is the result of a genetic or congenital abnormality.
C. Respondent's Expert: Dr. 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 Psychiatric Association. At the time of trial Dr. Dietz was a clinical professor of psychiatry and behavioral sciences at the University of California at Los Angeles School of Medicine. Dr. Dietz' specialty is forensic psychiatry, and he has written approximately 100 professional publications, mostly on sexual, criminal, and antisocial behavior from the standpoint of forensic psychiatry, in peer-reviewed journals, reference text chapters, and other media. Dr. Dietz was recognized as an expert in forensic psychiatry. He was retained by respondent for the purpose of addressing the question of whether GID or transsexualism is a disease or illness.
It is Dr. Dietz' opinion that GID is a mental disorder, susceptible of a correct or incorrect diagnosis, but not a disease or an illness because it has not been shown to arise from a pathological process within the body—a necessary condition for a disease in Dr. Dietz' view.
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 confirmed that bulimia
Dr. Dietz agrees that GID is sometimes associated with autopenectomy, autocastration, and suicide.
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.
B. Definition of Medical Care
Congress first provided an income tax deduction for medical expenses in 1942. See Revenue Act of 1942, ch. 619, sec. 127(a), 56 Stat. 825. The original provision was codified as section 23(x) of the 1939 Internal Revenue Code and read as follows:
At the time, the Senate Committee on Finance commented on the new deduction for medical expenses in relevant part as follows:
S. Rept. 1631, 77th Cong., 2d sess. 95-96 (1942), 1942-2 C.B. 504, 576-577 (emphasis added); see Stringham v. Commissioner, 12 T.C. 580, 583-584 (1949) (medical care is defined in broad and comprehensive language, but it does not include items which are primarily nondeductible personal living expenses), affd. 183 F.2d 579 (6th Cir. 1950).
The core definition of "medical care" originally set forth in section 23(x) of the 1939 Code has endured over time and is currently found in section 213(d)(1)(A), which provides as follows:
Thus, since the inception of the medical expense deduction, the definition of deductible "medical care" has had two prongs. The first prong covers amounts paid for the "diagnosis, cure, mitigation, treatment, or prevention of disease" and the second prong covers amounts paid "for the purpose of affecting any structure or function of the body".
The regulations interpreting the statutory definition of medical care echo the description of medical care in the Senate Finance Committee report accompanying the original enactment. The regulations state in relevant part:
Notably, the regulations, mirroring the language of the Finance Committee report, treat "disease" as used in the
Given the reference to "mental defect" in the legislative history and the regulations, it has also long been settled that "disease" as used in section 213 can extend to mental disorders. See, e.g., Fischer v. Commissioner, 50 T.C. 164, 173 n.4 (1968) ("That mental disorders can be `disease' within the meaning of [section 213(d)(1)(A)] is no longer open to question."); Starrett v. Commissioner, 41 T.C. 877 (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 synthesized the caselaw to arrive at a framework for analysis of disputes concerning medical expense deductions. Noting that the medical expense deduction essentially carves a limited exception out of the general rule of section 262 that "personal, living, or family expenses" are not deductible, the Court observed that a taxpayer seeking a deduction under section 213 must show: (1) "the 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 medical purpose, they must also pass a "but for" test: the taxpayer must "prove both that the expenditures were an essential element of the treatment and that they would not have otherwise been incurred for nonmedical reasons." Id. at 819.
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 transplants to treat premature baldness deductible under section 213).
In 1990 Congress responded to these rulings by amending section 213 to include new subsection (d)(9) which, generally speaking, excludes cosmetic surgery from the definition of deductible medical care. See Omnibus Budget Reconciliation Act of 1990, Pub. L. 101-508, sec. 11342(a), 104 Stat. 1388-471. A review of the legislative history of section 213(d)(9) shows that Congress deemed the amendment necessary to clarify that deductions for medical care do not include amounts paid for "an elective, purely cosmetic treatment". H. Conf. Rept. 101-964, at 1031 (1990), 1991-2 C.B. 560, 562; see also 136 Cong. Rec. 30485, 30570 (1990) (Senate Finance Committee report language on Omnibus Budget Reconciliation Act of 1990).
SEC. 213(d). DEFINITIONS—For purposes of this section—
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).
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 procedures"
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 prescribe hormone treatment, sex reassignment surgery, and, in appropriate circumstances, breast augmentation surgery for genetic males suffering from GID, expenditures for the foregoing constitute deductible "medical care" because a direct or proximate relationship exists between the expenditures and the "diagnosis, cure, mitigation, treatment, or prevention of disease", petitioner argues. Morever, petitioner contends, because the procedures at issue treated a "disease" as used in section 213, they are not "cosmetic surgery" as defined in that section.
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.
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 section 213(d)(9)(B), if a procedure "[treats] * * * disease", it is not "cosmetic surgery" that is excluded from the definition of "medical care".
Because the only difference between the quoted phrases in these two subparagraphs is the use of the noun form "treatment" versus the verb form "treat", we see no meaningful distinction between them. "Code provisions generally are to be interpreted so congressional use of the same words indicates an intent to have the same meaning apply". Elec. Arts, Inc. v. Commissioner, 118 T.C. 226, 241 (2002); see also Commissioner v. Keystone Consol. Indus., Inc., 508 U.S. 152, 159 (1993); United States v. Olympic Radio & Television, Inc., 349 U.S. 232, 236 (1955); Zuanich v. Commissioner, 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 section 213(d)(1)(A) or that a procedure is not "cosmetic surgery" under section 213(d)(9)(B). A showing that a procedure constitutes "treatment" of a "disease" both precludes "cosmetic surgery" classification under section 213(d)(9) and qualifies the procedure as "medical care" under section 213(d)(1)(A).
B. Is GID a "Disease"?
Petitioner argues that she is entitled to deduct her expenditures for the procedures at issue because they were treatments for GID, a condition that she contends is a "disease" for purposes of section 213. Respondent maintains that petitioner's expenditures did not treat "disease" because GID is not a "disease" within the meaning of section 213. Central to his argument is respondent's contention that "disease" as used in section 213 has the meaning postulated by respondent's expert, Dr. Dietz; namely, "a condition * * * [arising] as a result of a pathological process * * * [occurring] within the individual and [reflecting] abnormal structure or function of the body at the gross, microscopic, molecular, biochemical, or neuro-chemical levels."
On brief respondent cites the foregoing definition from Dr. Dietz' expert report and urges it upon the Court as the meaning of "disease" as used in section 213; namely, that a "disease" for this purpose must have a demonstrated organic or physiological origin in the individual. Consequently, GID is
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.
As a legal argument for the proper interpretation of "disease", respondent's position is meritless. Respondent cites no authority, other than Dr. Dietz' expert testimony, in support of his interpretation, and we have found none. To the contrary, respondent's interpretation is flatly contradicted by nearly a half century of caselaw. Numerous cases have treated mental disorders as "diseases" for purposes of section 213 without regard to any demonstrated organic or physiological origin or cause. See Fay v. Commissioner, 76 T.C. 408
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".
See also Jacobs v. Commissioner, supra at 818 (taxpayer's "severe depression" as evidenced by his psychiatrist's testimony is "disease" for purposes of section 213); Hendrick v. Commissioner, supra at 1236 ("emotional insecurity" of child is a "disease" for purposes of section 213); Sims v. Commissioner, supra ("disease" for purposes of section 213 found although "record does not contain a precise characterization of * * * [the taxpayer's son's] condition in medical terminology, there is ample evidence to support a finding that he suffered from some sort of learning disability, accompanied by emotional or psychiatric problems"). We have also considered a condition's listing in a diagnostic reference text as grounds for treating the condition as a "disease", without inquiry into the condition's etiology. In Starrett v. Commissioner, supra at 878 & n.1, 880-882, a reviewed Opinion, we treated "anxiety reaction" as a "disease" for purposes of section 213, pointing to the condition's recognition in the American Medical Association's Standard Nomenclature of Diseases and Operations (5th ed. 1961).
The absence of any consideration of etiology in the caselaw is consistent with the legislative history and the regulations. Both treat "disease" as synonymous with "a physical or mental defect", which suggests a more colloquial sense of the term "disease" was intended than the narrower (and more rigorous) interpretation for which respondent contends.
In addition, in the context of mental disorders, it is virtually inconceivable that Congress could have intended to confine the coverage of section 213 to conditions with demonstrated organic origins when it enacted the provision in 1942, because physiological origins for mental disorders were not widely recognized at the time. As Dr. Dietz confirmed in his testimony, the physiological origins of various well-recognized 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
In sum, we reject respondent's interpretation of "disease" because it is incompatible with the stated intent of the regulations and legislative history to cover "mental defects" generally and is contradicted by a consistent line of cases finding "disease" in the case of mental disorders without regard to any demonstrated etiology.
Having rejected respondent's contention that "disease" as used in section 213 requires a demonstrated organic origin, we are left with the question whether the term should be interpreted to encompass GID. On this score, respondent, while conceding that GID is a mental disorder, argues that GID is "not a significant psychiatric disorder" but instead is a "social construction"—a "social phenomenon" that has been "medicalized". Petitioner argues that GID is a "disease" for purposes of section 213 because it is well recognized in mainstream psychiatric literature, including the DSM-IV-TR, as a legitimate mental disorder that "causes serious, clinically significant distress and impairment of functioning".
For the reasons already noted and those discussed below, we conclude that GID is a "disease" within the meaning of section 213. We start with the two caselaw factors influencing a finding of "disease" in the context of mental conditions: (1) A determination by a mental health professional that the condition created a significant impairment to normal functioning, warranting treatment, see Fay v. Commissioner, 76 T.C. 408 (1981); Jacobs v. Commissioner, 62 T.C. 813 (1974); 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.
Even if one accepts respondent's expert Dr. Schmidt's assertion that the validity of the GID diagnosis is subject to some debate in the psychiatric profession, the widespread recognition of the condition in medical literature persuades the Court that acceptance of the GID diagnosis is the prevailing view. Dr. Schmidt's own professed misgivings about the diagnosis are not persuasive, given that he continues to employ the diagnosis in practice, believes that psychiatrists must be familiar with it, and recently gave a GID diagnosis as an expert in another court proceeding.
Second, GID is a serious, psychologically debilitating condition. Respondent's characterization of the condition on brief as a "social construction" and "not a significant psychiatric disorder" is undermined by both of his own expert witnesses and the medical literature in evidence. All three expert witnesses agreed that, absent treatment, GID in genetic males is sometimes associated with autocastration, autopenectomy, and suicide. Respondent's expert Dr. Schmidt asserts that remaining ambiguous about gender identity "will tear you apart psychologically". Petitioner's expert Dr. Brown likewise testified that GID produces significant distress and maladaption. Psychiatric reference texts, established as reliable authority by Dr. Brown's testimony, confirm the foregoing. See Fed. R. Evid. 803(18). One such text states:
Another psychiatric reference text states that "Prior to recognition of transsexualism as a disorder deserving medical and psychiatric attention many patients self-mutilated or committed suicide out of despair." Green, "Gender Identity Disorder in Adults", in New Oxford Textbook of Psychiatry 914 (Gelder, et al., eds., 2000).
Ms. Ellaborn concluded that petitioner exhibited clinically significant impairment from GID, to the extent that she designated petitioner's condition as "severe" under the DSM-IV-TR standards. Her diagnosis was supported by another doctoral-level mental health professional and by Dr. Brown. The severity of petitioner's impairment, coupled with the near universal recognition of GID in diagnostic and other medical reference texts, bring petitioner's condition in line with the circumstances where a mental condition has been deemed a "disease" in the caselaw under section 213.
Third, respondent's position that GID is not a significant psychiatric disorder is at odds with the position of every U.S.
Seven of the U.S. Courts of Appeals that have considered the question have concluded that severe GID or transsexualism constitutes a "serious medical need" for purposes of the Eighth Amendment. See De'lonta v. 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").
Deliberate indifference "requires that a prison official actually know of and disregard an objectively serious condition, medical need, or risk of harm." De'lonta v. Angelone, supra at 634. Many of the foregoing opinions either found that "deliberate indifference" had not been shown or remanded to
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 treatises in evidence and as acknowledged by all three experts in this case; (3) the severity of petitioner's impairment as found by the mental health professionals who examined her; (4) the consensus in the U.S. Courts of Appeals that GID constitutes a serious medical need for purposes of the Eighth Amendment, we conclude and hold that GID is a "disease" for purposes 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 contentions that certain comorbid conditions such as depression or transvestic fetishism had not been adequately ruled out as explanations of petitioner's condition.
We find that petitioner's GID diagnosis is substantially supported by the record. Ms. Ellaborn was licensed under State law to make such a diagnosis. A second licensed professional concurred, as did petitioner's expert, a recognized authority in the field. Ms. Ellaborn's testimony concerning her diagnosis was persuasive. She considered and ruled out comorbid conditions, including depression and transvestic fetishism, and she believed her initial diagnosis was confirmed by petitioner's experience with the steps in the triadic therapy sequence.
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 section 213, and that petitioner suffered from it, leave the question of whether petitioner's hormone therapy, sex reassignment surgery, and breast augmentation surgery "[treated]" GID within the meaning of section 213(d)(1)(A) and (9)(B).
In contrast to their dispute over the meaning of "disease", the parties have not disputed the meaning of "treatment" or "treat" as used in section 213(d)(1)(A) and (9)(B), respectively. We accordingly interpret the words in their ordinary, everyday sense. See Crane v. Commissioner, 331 U.S. 1, 6 (1947); Old Colony R.R. Co. v. Commissioner, 284 U.S. 552, 560 (1932) ("`The legislature must be presumed to use words in their known and ordinary signification'" (quoting Levy's Lessee v. M'Cartee, 6 Pet. 102, 110 (1832))); see also Heard v. Commissioner, 269 F.2d 911, 912 (3d Cir. 1959) ("The words of * * * [section 213] are to be given their normal meaning without striving to read exceptions into them."), revg. in part 30 T.C. 1093 (1958).
"Treat" is defined in standard dictionaries as: "to deal with (a disease, patient, etc.) in order to relieve or cure", Webster's New Universal Unabridged Dictionary 2015 (2003); "to care for or deal with medically or surgically", Merriam Webster's
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. Commissioner, 12 T.C. 409, 412 (1949). In Starrett v. Commissioner, 41 T.C. at 881, this Court concluded that the taxpayer's psychoanalysis was a treatment of disease because the taxpayer was "thereby relieved of the physical and emotional suffering attendant upon" the condition known as anxiety reaction.
Hormone therapy, sex reassignment surgery and, under certain conditions, breast augmentation surgery are prescribed therapeutic interventions, or treatments, for GID outlined in the Benjamin standards of care. The Benjamin standards are widely accepted in the psychiatric profession, as evidenced by the recognition of the standards' triadic therapy sequence as the appropriate treatment for GID and transsexualism in numerous psychiatric and medical reference texts.
Nonetheless, respondent's expert Dr. Schmidt contends in his report that "physician acceptance of the * * * [Benjamin standards] is limited" and that the standards are guidelines and are only "accepted as more than guidelines by professionals who advocate for hormonal and surgical treatment of Gender Identity Disorder". However, Dr. Schmidt conceded on cross-examination his prior sworn statement to the effect that he agreed with the Benjamin standards (except that psychotherapy should be mandatory rather than recommended) and was unaware of any significant disagreement with the Benjamin standards in the psychiatric field, other than those who believe that sex reassignment surgery is unethical,
Moreover, petitioner's expert Dr. Brown contends that in the case of severe GID, sex reassignment surgery is the only known effective treatment; indeed, Dr. Brown was unaware of any case where psychotherapy alone had been effective in treating severe GID. The U.S. Court of Appeals for the Seventh Circuit and the highest courts of two States have reached similar conclusions. See Maggert v. Hanks, 131 F.3d at 671; Sommers v. Iowa 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).
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 satisfaction) has not been demonstrated, whereas petitioner's expert Dr. Brown believes there is ample proof of positive therapeutic outcomes.
Psychiatric reference texts support Dr. Brown's position. See Green, "Gender Identity Disorder in Adults", in New Oxford Textbook of Psychiatry 915 (Gelder, et al., eds., Oxford Univ. Press 2000) (stating "Follow-up reports on operated transsexuals are generally quite favorable" and describing a study where transsexual patients were randomly
However, even assuming some debate remains in the medical profession regarding acceptance of the Benjamin standards or the scientific proof of the therapeutic efficacy of sex reassignment surgery, a complete consensus on the advisability or efficacy of a procedure is not necessary for a deduction under section 213. See, e.g., Dickie v. Commissioner, T.C. Memo. 1999-138 (naturopathic cancer treatments deductible); Crain v. Commissioner, T.C. Memo. 1986-138 (holistic cancer treatments deductible but for failure of substantiation); Tso v. Commissioner, T.C. Memo. 1980-399 (Navajo "sings" (healing ceremonies) deductible); Rev. Rul. 72-593, 1972-2 C.B. 180 (acupuncture deductible); Rev. Rul. 55-261, 1955-1 C.B. 307 (services of Christian Science practitioners deductible). It is sufficient if the circumstances "justify a reasonable belief the * * * [treatment] would be efficacious". Havey v. Commissioner, 12 T.C. at 412. That standard has been fully satisfied here. The evidence is clear that a substantial segment of 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-gender
In sum, the evidence establishes that cross-gender hormone therapy and sex reassignment surgery are well-recognized and accepted treatments for severe GID. The evidence demonstrates that hormone therapy and sex reassignment surgery to alter appearance (and, to some degree, function
While our holding that cross-gender hormone therapy and sex reassignment surgery are not cosmetic surgery is based upon the specific definition of that term in section 213(d)(9)(B), our conclusion that these procedures treat disease also finds support in the opinions of other courts that have concluded for various nontax purposes that sex
We consider separately the qualification of petitioner's breast augmentation surgery as deductible medical care, because respondent makes the additional argument that this surgery was not necessary to the treatment of GID in petitioner's case because petitioner already had normal breasts before her surgery. Because petitioner had normal breasts before her surgery, respondent argues, her breast augmentation surgery was "directed at improving * * * [her] appearance and [did] not meaningfully 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 pursuant to section 213(a).
For the reasons discussed below, we find that petitioner has failed to show that her breast augmentation surgery "[treated]" GID. The Benjamin standards provide that breast augmentation surgery for a male-to-female patient "may be performed if the physician prescribing hormones and the surgeon have documented that breast enlargement after undergoing hormone treatment for 18 months is not sufficient for comfort in the social gender role." The record contains no documentation from the endocrinologist prescribing petitioner's hormones at the time of her surgery. To the extent Ms. Ellaborn's or Dr. Coleman's recommendation letters to Dr. Meltzer might be considered substitute documentation for that of the hormone-prescribing physician, Ms. Ellaborn's two letters are silent concerning the condition of petitioner's presurgical breasts, while Dr. Coleman's letter states that petitioner "appears to have significant breast development secondary to hormone therapy". The surgeon here, Dr. Meltzer, recorded in his presurgical notes that petitioner had "approximately B cup breasts with a very nice shape."
Dr. Meltzer testified with respect to his notes that his reference to the "very nice shape" of petitioner's breasts was in comparison to the breasts of other transsexual males on feminizing hormones and that petitioner's breasts exhibited characteristics of gynecomastia, a condition where breast mass is concentrated closer to the nipple as compared to the breasts of a genetic female. Nonetheless, given the contemporaneous documentation of the breasts' apparent normalcy and the failure to adhere to the Benjamin standards' requirement to document breast-engendered anxiety to justify the surgery, we find that petitioner's breast augmentation surgery did not fall within the treatment protocols of the Benjamin standards and therefore did not "treat" GID within the meaning of section 213(d)(9)(B). Instead, the surgery merely improved her appearance.
The breast augmentation surgery is therefore "cosmetic surgery" under the section 213(d)(9)(B) definition unless it "meaningfully [promoted] the proper function of the body". The parties have stipulated that petitioner's breast augmentation "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 augmentation surgery "meaningfully [promoted] the proper function of the body" within the meaning of section 213(d)(9)(B). Consequently, the breast augmentation surgery is "cosmetic surgery" that is excluded from deductible "medical care".
Finally, respondent argues that petitioner's sex reassignment surgery was not "medically necessary",
Respondent's basis for the claim that petitioner's sex reassignment surgery was not medically necessary is the
Dr. Schmidt conceded in his report that a significant segment of those physicians who are knowledgeable concerning GID believes that sex reassignment surgery is medically necessary, ranging from those who believe such surgery is generally medically necessary in treating GID to those who think it is medically necessary in selected cases. As noted, petitioner's expert Dr. Brown believes that sex reassignment surgery is often the only effective treatment for severe GID, and a number of courts have concurred. Dr. Brown therefore believes the surgery is medically necessary for severe GID. See also Sadock & Sadock, supra ("When the patient's gender dysphoria is severe and intractable, sex reassignment may be the best solution.") Several courts have also concluded in a variety of contexts that sex reassignment surgery for severe GID or transsexualism is medically necessary. See Meriwether v. Faulkner, 821 F.2d at 412; Pinneke v. Preisser, 623 F.2d at 548; Sommers v. Iowa Civil Rights Commn., 337 N.W.2d at 473; Doe v. Minn. Dept. of Pub. Welfare,
The mental health professional who treated petitioner concluded that petitioner's GID was severe, that sex reassignment surgery was medically necessary, and that petitioner's prognosis without it was poor. Given Dr. Brown's expert testimony,
IV. Conclusion
The evidence amply supports the conclusions that petitioner suffered from severe GID, that GID is a well-recognized and serious mental disorder, and that hormone therapy and sex reassignment surgery are considered appropriate and effective treatments for GID by psychiatrists and other mental health professionals who are knowledgeable concerning the condition. Given our holdings that GID is a "disease" and that petitioner's hormone therapy and sex reassignment surgery "[treated]" it, petitioner has shown the "existence * * * of a disease" and a payment for goods or services "directly or proximately related" to its treatment. See Jacobs v. Commissioner, 62 T.C. at 818. She likewise satisfies the "but for" test of Jacobs, which requires a showing that the procedures were an essential element of the treatment and that they would not have otherwise been undertaken for nonmedical reasons. Petitioner's hormone therapy and sex reassignment surgery were essential elements of a widely accepted treatment protocol for severe GID. The expert testimony also establishes that given (1) the risks, pain, and extensive rehabilitation associated with sex reassignment surgery, (2) the stigma encountered by persons
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 "medical 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 Benjamin standards requirement that they document her breast-engendered anxiety is sufficient to find that the surgery did not fall within those standards. The majority's added reason, "the breasts' apparent normalcy", majority op. p. 73, I find
II. Statutory Interpretation
A. Introduction
We face a task that is not unusual for us, that is, interpreting 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.
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 misunderstanding of that disease.
For Judge Gustafson, petitioner's disease was the "delusion" 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
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 diagnosis 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 psychological sex. Indeed, his explanation comports with a consideration of the diagnostic criteria in DSM-IV-TR (cited by the majority, majority op. p. 36) for GID. In discussing the diagnostic features of GID, DSM-IV-TR states: "To make the diagnosis [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 symptoms,
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, however, 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.
The word "treat" is found in section 213(d)(9) only in the definition of "cosmetic surgery" in section 213(d)(9)(B).
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
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 conclusion 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.
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 meaningfully 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, however, 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 cosmetic 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/De_Morgan's_laws. The rules are:
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, substituting the relevant words, is: "does not meaningfully promote the proper function of the body and does not prevent or
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).
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 necessary. Majority op. p. 74. Apparently, the majority is preparing for a perhaps different view of the statute by the Court of Appeals. Judge Holmes' Brandeis brief
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-reassignment 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 necessary 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.
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:
McHugh, "Psychiatric Misadventures", Am. Scholar 497, 503 (1992). For such psychiatrists, gender follows sex, is a fundamental part of human nature, and is not easily amenable to change. Those who take this view look at transsexual persons 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 shorthand 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 characteristics).
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. Psychosomatic 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
I profess no expertise in weighing the merits of biodeterminism, 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 certainly 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 medical community. The membership of WPATH is limited, consisting 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:
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—generally accepted standards of care—make no mention of the Benjamin standards.
The Harry Benjamin International Gender Dysphoria Association's Standards of Care for Gender Identity Disorders, 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
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 indispensability 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 necessary." 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 general 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 particular percentage of adjusted gross income. Section 213(d)(9) then creates an exception to the exception for cosmetic surgery. 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
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 necessity rely on the listing and classification of disorders in the DSM.
This is essentially a test looking to the good-faith, subjective motivation of the taxpayer. There is no doubt that O'Donnabhain meets it with regard to her hormone therapy and SRS.
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 liberal 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 extensive 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 witness, 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
The majority also criticizes Dr. Schmidt for citing a religious 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.
There are numerous other clues that the picture of scientific 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."
It is true that the Meyer piece has been the subject of lively controversy,
2. There is, however, a related cluster of problems that judges and lawyers have had to solve—questions of the medical necessity of SRS in:
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 surgery 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:
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:
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 procedures 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 incorrect 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
This should have obviated the need to wade into the disputes about classification, etiology, and diagnosis of O'Donnabhain's GID. The majority does cite one sentence from the applicable regulation for the proposition that medical care is confined to expenses "`incurred primarily for the prevention or alleviation of a physical or mental defect or illness.'" 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 overturn 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.
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.
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:
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 guidance 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
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 appearance. 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 personal injury resulting from an accident or trauma, or disfiguring 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
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:
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 cosmetic surgery. On that basis I concur in the majority's allowing petitioner a deduction for genital surgery.
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 appearance 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 dissenting 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 suffering 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 Congress 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 section 213(d)(1)(A). I think this argument overlooks the nature of the exclusion in paragraph (9). The standard for deductibility under section 213(d)(1)(A) is inherently more generous
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 surgery 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 specific legislative mandate. I would hold that the breast surgery 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 indistinguishable 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 abnormality would be barred by section 213(d)(9). The issue is
HOLMES, J., agrees with this concurring in the result only opinion.
FOLEY, J., concurring in part
Preoccupied with establishing whether gender identification disorder (GID) is a disease, respondent and the majority fail to correctly explicate and apply the statute. In allowing deductions relating to petitioner's expenses, the majority has performed, on congressional intent, interpretive surgery even more extensive than the surgical procedures at issue—and respondent has dutifully assisted. This judicial transformation 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:
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 reconstruction, 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 disease).
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
Judge Halpern asserts that this analysis "disregards the rules of grammar and logic" and that De Morgan's laws dictate 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 Congress' plain language.
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 legislative history may be appropriate. See Anderson v. Commissioner, 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 preserve a deduction for expenses relating to SRS and the accompanying procedures. To the contrary, the legislative history states that Congress intended to preserve deductions relating to:
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 cosmetic
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 disallowance of expenses relating to procedures intended to improve a taxpayer's appearance—a disallowance so broad that Congress 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 definition of "cosmetic surgery", it is arguable that these procedures are "similar" to cosmetic surgery, not "medical care", and thus not deductible.
IV. Congressional Activity, Rather Than Respondent's Litigation 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
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 reassignment 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
The surgical procedures involved in this case are startling, and to avoid distraction from the actual issues, it is expedient to affirm what is not at issue here: Neither the tax collector nor the Tax Court sits as a board of medical review, as if it were reconsidering, validating, or overruling the medical profession's judgments about what medical care is appropriate or effective for what medical conditions. Likewise, neither 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 necessarily 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 disastrous (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 purposes. 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,
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 determine 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 construed in tandem. The subsection reads in part as follows (emphasis added):
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";
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 surgery 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 specific definition of "cosmetic surgery" in (d)(9)(B) may not and should not save the day for its deductibility. Rather, deductibility must be denied under (d)(9)(A) if the non-"cosmetic surgery" procedure is nonetheless "similar" to cosmetic surgery.
Second, assuming that subsection (d)(9)(B) permits deductibility if not both but only one of its prongs is satisfied (i.e., if a procedure only "prevent[s] or treat[s]"),
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 medical 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 provided. That is, if a medical procedure was a "treatment" but not a "mitigation", or was a "mitigation" but not a "treatment", 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 disallowance, and allowed a deduction in the case of an otherwise 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 undertaking
Congress provided that, to be deductible, an otherwise cosmetic procedure must "prevent or treat" a disease. Petitioner did not argue (and the majority does not hold) that SRS "prevents" 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 section 213(d)(9)(A) is equivalent to, or is shorthand for, "diagnos[e], cure, mitigat[e], treat[], or prevent[]" in subsection (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 ameliorating 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"
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—
A usage note observes that the "central meaning [of "mitigate"] 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 language 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 "mitigation" 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 "mitigation" 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 psychiatric expenses were "clearly `amounts paid for the diagnosis, cure, mitigation, treatment,' and `prevention' of a specific `disease'"; and we upheld the taxpayer's argument that he underwent psychoanalysis—
B. To yield a deduction, an appearance-improving procedure 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. Consequently, a general definition of "treat" that is not confined—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 dictionary 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 provision that turns on "treatment of patients"
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 disallowance. 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.
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 understood 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 narrowed 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 consistent 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 "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"—and thus illuminates the congressional purpose. Someone like petitioner who suffers from GID has no deformities that are addressed by SRS; he has no "congenital abnormality"; he has suffered no "accident or trauma, or disfiguring 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
The majority not only ignores those implications of subsection (d)(9)(A) for the purpose of the statute but also renders 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 disease but rather ameliorates deformities arising from it. Thus, only the precise meaning of "treat disease" in (d)(9)(B) harmonizes 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 particular attention to whether it is the patient, the symptoms,
With the foregoing understanding of the purpose and operation 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 perceived 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 characterization 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 psychiatric 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 disordered
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 contrary, 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 therapist diagnosed. Rather, the procedure changed only petitioner'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.
FootNotes
Transvestic fetishism "occurs in heterosexual (or bisexual) men for whom the cross-dressing behavior is for the purpose of sexual excitement. Aside from cross-dressing, most individuals with Transvestic Fetishism do not have a history of childhood cross-gender behaviors." DSM-IV-TR at 580. Petitioner reported to Ms. Ellaborn that she cross-dressed in order to feel more feminine rather than for purposes of sexual arousal.
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.
Transsexualism is also listed and described in the International Classification of Diseases, Ninth Revision, Clinical Modification (6th ed.) a publication of the American Medical Association used in the United States for assigning codes to various diagnoses and procedures. Similarly, various gender identity disorders, including transsexualism, are listed and described in the International Classification of Diseases, Tenth Revision, a 1992 publication of the World Health Organization that classifies diseases and health related problems.
Respondent stresses on brief that he stipulated that the foregoing publications were medical reference texts but did not stipulate the truth of their contents. Except where otherwise indicated, we consider medical reference texts solely for the fact that they recognize GID or transsexualism and treatments for the condition.
We disagree. The deductibility of petitioner's facial surgery, undertaken in years other than the year in issue, is not at issue in this case. However, there is substantial evidence that such surgery may have served the same therapeutic purposes as (genital) sex reassignment surgery and hormone therapy; namely, effecting a female appearance in a genetic male. Both Ms. Ellaborn and Dr. Meltzer testified that petitioner had masculine facial features which interfered with her passing as female. The expert testimony confirmed that passing as female is important to the mental health of a male GID sufferer, and the Benjamin standards contemplate surgery to feminize facial features as part of sex reassignment for a male GID sufferer. Thus, we conclude that the facial surgery does not suggest, as respondent contends, that petitioner had a propensity for conventional cosmetic surgery.
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.
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* * * [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.
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 because all procedures directed at improving appearance would already be in the set labeled "cosmetic surgery").
The Senate Amendment provides that expenses paid for cosmetic surgery or other similar procedures 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 provision, 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, majority op. note 54, there is no reference to "medical necessity".
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).
I must, however, note the Commissioner's alternative argument that "negative myths and ignorance 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 society." 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.
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.
Until recently, Minnesota was the only state in which Medicaid paid for SRS. Price, "Minnesota 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).
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 suggested 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 imprudent 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 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").
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