In vitro fertilization (IVF) is expensive, often costing tens of thousands of dollars. It also is normally not covered by health insurance. Naturally, couples and individuals who pay for this procedure seek to deduct their expenses from their taxes. Under current law, taxpayers who itemize their personal deductions may deduct their medical (and dental) expenses if, and to the extent, they exceed 10% of their adjusted gross income. IVF expenses, as well as other medically- assisted procedures to combat infertility, can be a deductible medical expense if the procedure is performed on a taxpayer personally, on his or her spouse, or on a dependent. But what about where a gay man attempts to use IVF to have children through unrelated female surrogates? Both the IRS and courts have held there is no medical expenses deduction in such cases.
The most recent case involved Joseph Morrissey, a gay man who also happened to be a law professor. He and his long-time male partner decided to try to have children through IVF. This involved collecting Morrissey’s sperm, using that sperm to fertilize eggs donated by one woman, and then implanting the resulting embryos into the uterus of a second woman who served as a gestational surrogate. Between 2010 and 2014, Morrissey paid over $100,000 for seven IVF procedures involving multiple surrogates. Almost all of this money was spent to identify and pay the women who served as egg donors and surrogates and provide them with medical care. Only $1,500 was for Morrissey’s own blood work and sperm collection. Morrissey attempted to deduct over $36,000 of these expenses for 2011. The IRS denied the deduction and the U.S. Court of Appeals agreed.
Deductible medical expenses are broadly defined by the tax law as amounts paid “for the diagnosis, cure, mitigation, treatment, or prevention of disease” or “for the purpose of affecting any structure or function of the body.” (IRC Sec. 213.) Thus there are two ways a taxpayer may qualify for the medical expense deduction: paying for medical care (1) arising from a “disease” or (2) affecting a person’s bodily “structure or function.” Morrissey didn’t have a disease. But he argued that his IVF expenses qualified as deductible medical care because they affected his body’s “reproductive function.” Morrissey also argued that denial of the deduction was a violation of his equal protection rights under the Constitution.
The court held that Morrissey’s’ IVF expenses were not deductible because they were not paid to affect his own reproductive function. Indeed, there was nothing wrong with his body’s reproductive function—he was fully capable of producing healthy sperm. Rather, the IVF expenses were paid to affect the reproductive functions of unrelated third parties—the female egg donors and surrogates. Since these expenses did not involve Morrissey’s own bodily functions (or those of a spouse or dependent), he couldn’t deduct them.
The court also held that denying the deduction didn’t violate Morrissey’s constitutional rights or discriminate against him. The court said a man has no fundamental legal right to procreate via an IVF process and that the medical expense deduction treats heterosexual and homosexual taxpayers on equal terms. (Morrissey v. United States, No. 8:15-cv-02736 (11th Cir. Sept. 25, 2017.)
This is the third legal decision that has denied a medical expense deduction for IVF expenses paid by men for unrelated women. One case involved a man who paid for IVF for his fiancé—had he waited until he married the woman, the expenses would have been deductible. (Longino v. Comm’r, 105 T.C.M. 1491.)