Mahany & Ertl

by Brian Mahany

Recently, I represented an individual who was criminally charged by the IRS for fraudulent tax returns. Although we achieved a great result for the client, his attempt to deduct his wife’s breast enlargement surgery was rejected by the court. It turns out, however, that removal of one’s penis is tax deductible.  Why the difference?

In the most recent breast enlargement case, the IRS had disallowed $21,741 in medical expenses incurred for hormone therapy, removal of the taxpayer’s penis (”sex reassignment” surgery) and breast augmentation. After a full trial, the U.S. Tax Court decided that a sex change could be medically necessary if the taxpayer suffers from Gender Identity Disorder (GID). Because the hormone therapy had already produced some apparent enlargement of the taxpayer’s breasts, however, the court ruled that the expenses related to the breast enlargement procedure were cosmetic and therefore not deductible.

The IRS unsuccessfully argued that GID was a social phenomenon and not a real disorder. One of the expert witnesses, however, testified that remaining ambiguous “will really tear you apart psychologically” and that people suffering from GID are more prone to self castration.

Will Hooters girls be able to deduct breast surgery as a business expense? Actually, yes.  According to TurboTax’ website, A stripper named “Chesty Love” decided to increase her breast size to 56FF. She argued her larger “assets” would lead to larger tips. The IRS again disagreed but the U.S. Tax Court sided with Chesty. (Side note - apparently Chesty became so top heavy that she tripped and ruptured an implant.)

What is the lesson here?  Nontraditional surgery if done for valid medical reasons can be deducted. But don’t expect any cooperation from the IRS. If you lose before the Service, plan on a lawyer, court fight and a medical expert.

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Mahany & Ertl is a full service law firm located in Milwaukee, Wisconsin. Our tax lawyers can help with a variety of tax problems - tax evasion investigations, collections, audits, non-filers, tax liens and tax court. Don’t face the IRS alone - call attorney Brian Mahany or Christopher Ertl today.