The Internal Revenue Service granted a tax deduction to a woman who contended her sex-change operation was medically necessary treatment for her diagnosed condition "gender dysphoria."

The decision overturned a tax examiner's refusal to allow Rhiannon O'Donnabhain's claim because he regarded the surgery as "cosmetic."

The group Gay & Lesbian Advocates & Defenders , which defended O'Donnabhain, said the ruling last week has significant implications for other government programs and private contracts of insurance.

"This important decision recognizes that sex reassignment can be as medically necessary for some people as an appendectomy or heart bypass surgery,” said GLAD attorney Karen Loewy.

"Any notion that medical treatment for a transgender person is purely cosmetic is based on misunderstanding and prejudice, not medical science," she asserted.

The IRS appeals officer determined, according to GLAD, the surgery was "an integral part of a professionally prescribed course of treatment for her diagnosed condition."

O'Donnabhain underwent the surgery in 2001 after having been diagnosed with "gender dysphoria," GLAD said.

"She and her health care providers determined that sex reassignment surgery was a medically necessary step to enable her to live her life as a woman," the group said.

"I am greatly relieved by the Appeals Officer's decision," said O'Donnabhain. "While the money was important to me, so too was the underlying principle. I hope this case sends a clear message that transgender people deserve dignity, respect and equal treatment for our medical care."