Rhiannon O’Donnabhain (oh-DON’-oh-vin), who was born a man, sued the Internal Revenue Service after the agency rejected a $5,000 deduction for approximately $25,000 in medical expenses associated with the sex-change surgery.

The IRS said the surgery was cosmetic and not medically necessary.

In its decision Tuesday, the tax court said the IRS position was “at best a superficial characterization of the circumstances” that is “thoroughly rebutted by the medical evidence.”

The legal group Gay & Lesbian Advocates & Defenders, which represented O’Donnabhain, said the ruling could potentially affect thousands of people a year in the U.S. who undergo similar operations.

“I think what the court is saying is that surgery and hormone therapy for transgender people to alleviate the stress associated with gender identity disorder is legitimate medical care,” said Jennifer Levi, a GLAD attorney.

IRS spokeswoman Michelle Eldridge declined to comment on the ruling.

In a 2007 interview with The Associated Press, O’Donnabhain said she underwent sex-reassignment surgery at age 57, after a tormented existence as a father, husband, Coast Guardsman and construction worker.

She wrote off the $25,000 in medical expenses on her taxes, but the IRS disallowed the deduction, ruling that the procedure was not a medical necessity.

O’Donnabhain, now 65, said she brought the lawsuit in an attempt to force the IRS to treat sex-change surgeries the same as appendectomies, heart surgeries and other deductible medical procedures.

“It is not OK for them to do this to me or anyone like me,” she said.

O’Donnabhain’s lawyers argued that because gender-identity disorder is a recognized mental disorder that is generally treated with hormones and surgery, the costs are legitimate medical deductions.

The tax court agreed.

“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,” the court said in its ruling.

An estimated 1,600 to 2,000 people a year undergo sex-change surgery in the United States, according to the Gay and Lesbian Medical Association.

The tax court said O’Donnabhain could deduct as a medical care expense the costs associated with treating her gender-identity disorder, including sex-reassignment surgery and hormone therapy. But the court said she could not deduct the costs of breast augmentation surgery because it found that she had achieved breast enhancement through hormone treatments.

The proposed guidelines, posted Tuesday, say candidates for surgery must show an agreement from police to change their sex on their identification cards once the procedure is complete.

The ministry posted the draft guidelines to invite public and professional opinions before July 10. China has no laws against sex change surgery, and the ministry says the guidelines are necessary to regulate the procedure.

One bioethicist at the Chinese Academy of Social Sciences, in an interview with state media, criticized the proposed requirements for police agreement and for patients to live openly in their desired gender for at least two years before surgery.

“As long as a person meets the physical and mental requirements, she or he should be granted the permit to have the surgery. … The police should change the sex of the receiver on the identity card accordingly,” Qiu Renzhong was quoted as saying by the official China Daily newspaper in its report Wednesday.

Although attitudes about sex in China have become increasingly relaxed, especially in big cities, the country remains a conservative society where sexual identity issues are not freely discussed.

Sex change surgery is one treatment available for gender identity disorder, a condition defined by strong feelings of discomfort with a person’s sex at birth and identification with the opposite gender.

Experts estimate that nearly 2,000 Chinese have undergone sex change surgery while 100,000 to 400,000 people are “considering it,” the China Daily said. It said no official statistics on transsexuals in China are available.

The World Professional Association for Transgender Health recommends that sex change surgery candidates undergo hormone therapy and counseling and live in their desired gender roles for at least a year before the procedure.

China’s proposed guidelines also say candidates must show they have no record of criminal offenses and have told their immediate family that they are undergoing the operation. Patients also must be over 20, single, and have undergone psychological therapy for at least a year.

The Health Ministry authorized the operations last year, but none has been performed since. It was unclear when the surgeries would begin.

Mariela Castro, a sexologist and gay-rights advocate, announced the return of sex-change procedures in comments aired on state television. She runs the Center for Sex Education, which prepares transsexuals for sex-change operations and has identified 19 transsexuals it deems ready to undergo the procedure.

Castro also said she backs efforts to allow lesbians to be artificially inseminated, a procedure currently barred.

The first successful sex-change operation was performed on the island in 1988, but subsequent procedures were prohibited, Mariela Castro told an international congress on assisted reproduction meeting in Havana.

Some Cubans protested the decision last year to allow the operations, either because of general opposition to the procedure or for its high costs for a developing country with economic problems.

The government would bear the cost of the operations because Cuba has a universal health care system.

For more than four decades, Illinois has permitted individuals who have gender confirmation surgery to change the gender “marker” on an original birth certificate.

The Department of Vital Records, however, recently started interpreting the law to provide this option only if an individual has the surgery by a United States-licensed physician. This creates an unnecessary and unfair burden for the growing number of persons who select a surgeon from Europe, South America or Asia, according to the ACLU of Illinois.

Both of the women in the lawsuit filed Tuesday opted for their own reasons to have their gender confirmation surgery in Thailand. The women are represented by the ACLU of Illinois.

The lawsuit, filed in Cook County Circuit Court, argues that denying these women – and others who face the same situation – the ability to secure a new, accurate birth certificate not only creates everyday challenges that are unnecessary and dangerous, but it is antithetical to the advice of medical experts who recommend that persons who transition their gender identity ensure that all aspects of their lives reflect that gender identity.

“I am a woman and I have identified as a woman since early childhood,” said Victoria Kirk, one of the plaintiffs in the suit.

“After making the difficult decision – with the advice and support of my physician and a therapist – to have surgery to conform to this identity, it was disheartening to learn that the State of Illinois would not issue a new birth certificate that recognizes me as a woman simply because I elected to have surgery overseas.”

The lawsuit notes that a birth certificate is a fundamental document for any individual, and having a birth certificate that accurately reflects one’s gender is critical. An accurate birth certificate is important not only in those situations where an employer may require a birth certificate to start a new job, but also – especially under REAL ID proposals approved by Congress – may be necessary in the future to secure identification to drive a car, enter a federal building or board an airplane.

Like Kirk, the other named plaintiff, Karissa Rothkopf was careful in selecting a surgeon for her gender confirmation surgery. She said she reviewed credentials and patients’ reviews of professional surgeons in the Untied States and across the globe, and communicated with the surgeons and their staff about their techniques and recommendations for her particular surgery. Additionally, she said she consulted heavily with her own physician and her therapist.

In the end, she decided that the Thai surgeon she selected offered the safest and best option for her.

“My surgeon was the best option – the best medical option – for me,” said Rothkopf. “My choice of surgeon should not affect my ability to get access to an accurate, current birth certificate.”