LBGT and the IRS

Is being gay a choice? The IRS still thinks so. That was one of the reasons that was given in the denial of a medical deduction for in-vitro fertilization and surrogacy expenses for a Florida gay man.

 Joseph F. Morrissey is a constitutional and business law professor at Stetson University. He is suing the federal government in an attempt to overturn a ruling by the IRS for the denial of the aforementioned medical deduction. Mr. Morrissey and his long-term partner have twin sons who were born last year from a surrogate. According to the lawsuit filed in federal court in Florida, the process took “nearly four years, seven IVF procedures (including those scrubbed at the last minute for failed medical exams), three surrogates, three egg donors, two clinics and more than $100,000,”. At the time that Mr. Morrissey started the process, it was illegal in Florida for a homosexual to adopt a child.

On his 2011 income tax return, Mr. Morrissey took a medical deduction of $36,538 for fertility costs on Schedule A of his 1040. This saved him $9,539 in federal income tax.

His return was pulled for audit examination by the IRS. The IRS eventually denied the medical deduction on the grounds that the medical expenses were not related to the taxpayer, his spouse or dependents, nor were they necessary to treat a medical condition. Furthermore, the IRS Revenue Agent who audited his return stated that being gay is a “choice” and that Mr. Morrissey could have children by traditional methods.

The IRS has previously granted the medical deduction for surrogacy costs for straight couples in which one of the spouses was infertile. Section 213 of the Internal Revenue Code states that medical expenses are only deductible to treat a medical condition. In 2008, in Magdalin, TC Memo 2008-293, the US Tax Court ruled that the IRS could deny a medical deduction for surrogacy costs to a single man based on the fact that he had no medical condition preventing him from having kids.

Mr. Morrissey contended that since he is gay and in a monogamous relationship, he is “effectively infertile”. Also, the surrogate would have no parental rights and the baby would be a dependent of Mr. Morrissey, therefore the medical expenses were related to a dependent and thus deductible under section 213.

Mr. Morrissey is now suing the IRS in federal court seeking a judgement for the amount of the tax savings from the medical deduction plus attorney fees. He is also seeking to prevent the IRS from treating him differently from heterosexual couples.

The case is Morrissey v. United States of America, M.D. Fla. 2015 (Case No. 8:2015cv02736).