IRS Says Assisted Reproduction for LGBTQ Couples Not Deductible

With income tax time upon us, same-sex couples who hoped to deduct expenses for assisted reproductive technologies such as egg or sperm donation, in vitro fertilization or surrogacy are meeting with disappointment—even as heterosexual peers are able to successfully claim those same deductions. In January 2021, the IRS issued a Private Letter Ruling, or PLR, that upholds the agency’s historic denial of deductions for certain reproductive health procedures for same-sex couples and LGBTQ individuals.

As reported in The Tax Adviser, the IRS issued Letter Ruling 202114001 in response to a request from a legally married gay couple, who planned to have a child using sperm from one partner and eggs from the second partner’s sister, with an unrelated gestational surrogate. The couple sought to deduct expenses for egg retrieval, sperm harvesting and freezing, IVF, medical insurance related to the pregnancy, childbirth expenses for the surrogate and surrogacy legal and agency fees.

Under Section 213 of the U.S. tax code, taxpayers may itemize deductions for unreimbursed medical expenses, based on taxpayers’ adjusted gross income (AGI), as long as the total deductions exceed 7.5 percent of AGI. The code defines legitimate medical deductions as expenditures for diagnosis or treatment of disease or for procedures “for the purpose of affecting any structure or function of the body.” The latter might include reproductive procedures such as vasectomies or tubal ligations.

Tax Deductions Limited to Medical Infertility of Taxpayer

In its letter, the IRS adheres to the historically narrow definitions of what constitutes a valid medical deduction. “[G]enerally, for an expense to be deductible, there must be a causal relationship between a medical condition and the expenditures incurred in treating the condition,” the letter reads. “The [ruling request does] not identify a medical condition nor do taxpayers allege that expenses are incurred to treat a medical condition. Rather the request relies on the second portion of I.R.C. § 213(d)(1)(A) in claiming IVF, surrogacy, and related costs are for the purpose of affecting any structure or function of the body….”

The IRS concludes that the second criteria that procedures “affecting any structure or function of the body” would be deductible refers solely to the taxpayer’s body, and not to the bodies of third parties, such as egg donors or surrogates.

The letter concludes that the male couple’s expenses relating to third parties, including egg donation, IVF, surrogacy, health insurance for the surrogate, and any legal and agencies fees are not deductible. Medical expenses for procedures directly related to the taxpayers, such as sperm donation and sperm freezing, are deductible.

The IRS letter references three supporting cases in justifying its denial, as reported by The Tax Adviser. In the 2009 case Magdalin v. Commissioner, a single, heterosexual male taxpayer tried to deduct IVF costs, surrogacy expenses and legal fees. The Tax Court denied the deductions because the expenses were not for diagnosis or treatment of a medical condition nor for "affecting a structure" of the taxpayer’s body.

In the second case, Longino v. Commissioner, the male taxpayer deducted expenses for IVF procedures for his former fiancée. The Tax Court ruled the taxpayer could not deduct the IVF costs of an unrelated person unless the taxpayer himself were infertile.

In its third supporting case, the IRS cites Morrissey v. United States, in which the taxpayer, a gay man in a same-sex relationship, tried to deduct expenses related to egg donation, IVF and surrogacy. The taxpayer did not claim to be medically infertile; rather, he claimed to be “effectively” infertile as a gay male. The Eleventh Circuit Court denied the deductions because the purpose of the claimed procedures was not to affect the “structure or function” of the taxpayer’s own body.

Outdated Tax Rules Based on Outdated Definitions of Parentage

In a nutshell, the IRS won’t let you deduct medical costs for procedures performed on a third party, unless it is to remedy your, the taxpayer’s, own medical condition, such as medical infertility.

I first wrote about the issue of sexual orientation and gender-related inequities in the U.S. tax code in 2015, when a Florida law professor sued the IRS after being denied $36,000 in deductions for expenses related to the conception and birth of twin sons in 2014. After four years and more than $100,000 spent on egg donation, IVF and surrogacy, the professor appealed the denial, becoming the first to argue that the inability of two men to conceive constitutes medical infertility. In rejecting his appeal, the reviewing IRS agent referred to the professor’s sexual orientation as a “choice.”

As is the case with insurance coverage for assisted reproduction, rules, regulations and case law are lagging the reality: Even though same-sex marriage has been legal in the United States since 2015, many of the hundreds of U.S. and state laws and regulations related to marriage continue to treat married heterosexual couples differently from married same-sex couples.

Regretfully, even as some states, such as Maryland, have enacted reforms to address inequities for same-sex couples, it appears the IRS still clings to antiquated definitions of reproduction, parentage and family. As a result, same-sex couples seeking assisted reproductive services all too often face legal, financial and medical obstacles not encountered by their heterosexual peers. By inflexibly enforcing a system in which same-sex couples are denied deductions commonly allowed for heterosexual couples, the IRS is prolonging, if not lending implied support to, the unfairness.

Disclosure: My firm, International Fertility Law Group, focuses exclusively on fertility law. For information or advice regarding your specific income tax situation, please consult your tax attorney or accountant.

Richard Vaughn

Attorney Rich Vaughn is founder and principal of International Fertility Law Group, one of the world’s largest and best-known law firms focused exclusively on assisted reproductive technology, or ART, including in vitro fertilization (IVF), surrogacy, sperm donation or egg donation. Rich is co-author of the book “Developing A Successful Assisted Reproduction Technology Law Practice,” American Bar Association Publishing, 2017.

Peiya Wang
Paralegal (律师助理)

Peiya Wang joined IFLG as a paralegal in 2015, where she manages surrogacy, egg donation and parental establishment cases and provides translation services for many of IFLG’s international clients. Peiya moved to the United States in 2012 to attend Northeastern University in Boston, Massachusetts, receiving a Master of Science degree in Global Studies and International Affairs in 2014. Peiya moved to Los Angeles in 2015, received her paralegal certification from UCLA Extension, and obtained her second Master of Science degree in Legal Studies from Loyola Law School. Peiya relocated back to her hometown, Beijing, China in 2019 and works from IFLG’s Beijing office. When away from the office, Peiya is a dragon boat paddler and a ballroom dancer, where she favors Rumbas and Cha-chas. She is fluent in Mandarin and English.

Luis Sosa

Luis R. Sosa joined IFLG as a paralegal in 2016, where he enjoys pursuing his passion for family and reproductive law. While working toward his bachelor’s degree at Florida International University which he received in 2013, Luis worked as a paralegal and legal assistant for family law litigation firms in Miami and Washington, D.C. As a paralegal and case manager for IFLG, Luis, who is bilingual in English and Spanish, manages surrogacy, egg donation and other reproductive law cases. Luis has worked for IFLG in both Los Angeles as well as San Francisco, and is currently based in Dallas, Texas. In addition to spending time with husband Randy and dog Marty, Luis enjoys being outdoors and appreciating the arts.

Toni Hughes

After receiving her B.S. in Business Management, Toni joined IFLG to pursue her dream of working in the legal field. As a Paralegal with over 10 years of experience in the assisted reproduction technology field, Toni is our Managing Paralegal, responsible for training and managing our paralegal staff. From drafting legal documents to assisting our clients with post-birth matters, Toni embraces the challenge of learning something new in this field each day. Besides spending time with her son, Jordan, Toni enjoys exploring new things, cooking, spending time with family and friends, and serving as a Youth Advisor for “Next Generation.”


Kim has over 30 years of experience in the legal field and has worked exclusively in surrogacy and assisted reproduction law since 1999. Kim is a senior case manager responsible for managing parental establishment cases and interacting with IFLG’s Of Counsel attorneys across the country. With three children of her own, Kim understands the importance of family and finds working in this area of law a rewarding experience.

Rich Vaughn

Attorney Rich Vaughn combined his personal passion as a father of twin boys born via assisted reproductive technology (ART) with more than 20 years of experience in business and technology law to build International Fertility Law Group. Today IFLG is one of the most successful and best-known law firms in the world focused exclusively on fertility law, helping thousands of intended parents through empathetic listening, compassionate guidance, and unmatched legal expertise. As an advocate for reproductive freedom, Rich also contributes his knowledge and time to improving the understanding and practice of ART law, most recently as a founder of and speaker at the first Cambridge University International Surrogacy Symposium held in June 2019, as immediate past chair of the American Bar Association ART Committee, and as a popular presenter to law schools, faculty and advocacy organizations all over the world.

Elizabeth Tamayo

Elizabeth received her Bachelors of Science degree in Criminal Justice from California State University of Los Angeles. Shortly after graduating, she continued her education at the University of California, Los Angeles where she obtained her Paralegal certificate. Elizabeth is fluent in Spanish and has been in the legal field since 2009. She is excited to be a part of the IFLG Team helping families realize their dreams.

Sunny Chien

Sunny joined IFLG as a paralegal in 2017, where she manages surrogacy, egg donation and parental establishment cases for many of IFLG’s international clients. She holds a Bachelor of Arts degree in Philosophy from California State University of Los Angeles, where she graduated cum laude. Sunny is bilingual in English and Mandarin and has extensive experience as a legal assistant and paralegal at Los Angeles-area law firms. She is excited to be part of the IFLG team. In her spare time, Sunny enjoys spending time with her family and their dog, going to the beach, cooking, and being outdoors.

Los Angeles

5757 Wilshire Blvd., Suite 645

Los Angeles, CA 90036

Phone:  +1 323 331 9343

Email:  info@iflg.net

Website:  www.iflg.net

New York

501 Fifth Avenue, Suite 1900

New York, NY 10017

Phone:  +1 844 400 2016

Email:  info@iflg.net

Website:  www.iflg.net

Molly O'Brien

Fertility law attorney Molly O’Brien began working in the field of assisted reproduction technology (ART) in 2005, at an egg donation agency and a surrogacy agency where she became familiar with all aspects of in-vitro fertilization, egg donation and the financial aspects of surrogacy. Since becoming an attorney in 2011, Molly has drafted and negotiated surrogacy, egg donation, sperm donation embryo donation agreements for hundreds of her clients all over the world.

Phoebe Sadler

Fertility law attorney Phoebe Sadler has a background in family law and has been practicing exclusively in the area of assisted reproduction technology (ART) law since 2018.

Rubina Aslanyan

Rubina has an extensive background in the legal field as a paralegal in Family Law and has worked in surrogacy and assisted reproduction law since 2012. Her area of focus is in managing and assisting clients with surrogacy, egg donation, and parental establishment cases for many of IFLG’s domestic and international clients. During her spare time, Rubina enjoys spending time with her family and dog Bella, traveling and cooking.

Alexander Espinoza
Legal Assistant

Alexander joined IFLG as a legal assistant in 2019, where he manages surrogacy, egg donation and parental establishment cases. Alex is bilingual in English and Spanish and has been in the legal field for 23 years. Alex is excited to join the IFLG team and pursuing his will to help others in the reproductive law process. In his spare time he loves spending time with his family and friends, being outdoors, road trips, loves music and dancing.

Cara Stecker
Senior Paralegal

After receiving her paralegal certificate in 2005, Cara began working in assisted reproductive law. During the fifteen years Cara has worked in this field, she has gained a wide range of experience and knowledge that she uses to help better assist clients and those involved in the assisted reproductive journey. Cara’s primary roles involve managing parental establishment matters and coordination with IFLG’s Of Counsel attorney network, drafting contracts and parental establishment court documents and providing support to other team members. Cara finds great joy in being a small part of a team of caring people who help others achieve their dream of having a family. In her spare time, Cara enjoys spending time with her husband and three children, watching her children play the sports they love, and she enjoys, running, cycling and exploring the outdoors in the sun.

Stephanie Kimble

Stephanie received her BS in History and Political Thought from Concordia University Irvine in 2015 and her Paralegal Certificate from University of San Diego later that same year. She has been working as a Paralegal since 2016 in Family and Reproductive Law. She is excited to be part of International Fertility Law Group working on managing Surrogacy, Egg donation and Parental Establishment Cases.

Trish Pittman
Assistant Financial Coordinator

With more than 20 years of experience in the field of accounting, Trish joined the IFLG team in 2019 as Assistant Financial Coordinator. Her client-facing focus at IFLG is to assist with all client trust accounting. Trish is the mother of two daughters and enjoys spending time teaching and learning new things from them. In her free time, she loves long walks in the park and reading suspense and mystery novels.

Katie Deaquino
Senior Paralegal

Katie is a Senior Paralegal with IFLG and has dedicated over sixteen years to the areas of surrogacy and reproductive law. She received her Paralegal Certificate from Coastline Community College and has worked with some of the top law firms in the assisted reproduction community. Katie is also a commissioned Notary Public. With IFLG, Katie manages Surrogacy, Egg Donation, and Parental Establishment cases and provides support to other IFLG team members. Katie truly enjoys helping others build their families through assisted reproduction and is thankful she has had the rewarding experience of assisting IFLG clients. Katie often spends her free time with her Husband, four young children and her bulldog “Bella”.

Elsa Jimenez
Legal Assistant

Elsa joined IFLG as a Legal Assistant in 2019, bringing more than 35 years of experience working in the legal profession (concentrating in tort and litigation matters). At IFLG she assists surrogates with their surrogacy and parental matters. The oldest of five siblings, born and raised in East Los Angeles to Mexican immigrant parents, Elsa loves “seeing the beauty of families forming” through assisted reproductive technology. She and her husband Carlos have four children and one grandson. Elsa enjoys jazz and ’80s music, being outdoors in nature, collecting teacups and tea pots, and spending time with her close-knit family.