Posted with permission from Above The Law

Congrats Ronaldo!  Before I delve into this week’s topic, I want to congratulate another celebrity who is set to have children via a surrogate. Admittedly, as an American, I haven’t learned to truly appreciate the sport of soccer yet. But even I understand that Cristiano Ronaldo is a big deal. Ronaldo currently has a seven-year-old son, who may also have been born via surrogacy.  Now, Ronaldo is rumored to be expecting twin boys to be born via surrogacy any day. A big congratulations in advance (x2!) to big brother Cristiano Jr. and dad!

Unfortunately, while we are celebrating Ronaldo becoming a father again, things are looking a little bleaker for American LGBT potential parents.

Adoption Discrimination.  South Dakota passed a statute authorizing adoption agencies to discriminate against LGBT individuals. In the name of religious freedom, the new law provides that no child placement agency can be required to provide services in a manner inconsistent with a “sincerely held religious belief or moral conviction.”

While the statute does not name any group in particular, advocacy groups such as the ACLU have condemned the statute as authorizing discrimination against the LGBT community. A spokesperson for the Human Rights Campaign said that the new statute “signals the potential of a dark new reality for the fight for LGBTQ rights.” In some ways, this reminds me of the common “bake the cake” arguments. But this time, I’ll just say, place that child.

Goodbye to Surrogacy in One More State? While places like Washington, D.C. have repealed their ban on surrogacy, Arkansas is potentially headed in the other (bad) direction. Last week, proposed legislation was introduced to prohibit commercial surrogacy altogether, as well as the enforcement of all surrogacy agreements – commercial or not, or entered into Arkansas or another state. For straight and gay couples alike, preventing intended parents from paying surrogates simply cuts down the number of potential surrogates, and makes it harder to begin or expand a family. As I’ve mentioned before, I would hope that free-market oriented conservatives would see the value in allowing a vibrant and free exchange of services for value. (i.e., carrying for compensation).

Et Tu, IRS? As regularly noted in this column, surrogacy is expensive. From fertility clinic costs, to psychiatrists, to the surrogate’s expenses and compensation and, most important of all, to attorney fees—the costs add up. Fortunately, certain medical expenses associated with infertility can be deducted for federal taxation purposes. Yay, for tax deductions!

But one law professor thought that the IRS medical deduction allowances are unconstitutionally narrow. Joseph Morrissey—a law professor at Stetson University (Florida’s first law school!)—brought suit against the IRS for denying his medical tax deduction. The deduction was for over $36,000 (although his total expenses were well into six figures), and related to IVF and surrogacy expenses. Morrissey had been with his partner for over 10 years when they underwent the expensive process of having children (twins!) via egg donor IVF and surrogacy.

In December 2016, a U.S. district court in Florida ruled in favor of the IRS, finding that Morrissey was not entitled to a deduction for his IVF and surrogacy expenses. Those expenses, the court held, were related to third persons (the donor and surrogate) and not to the “medical care of the taxpayer, his spouse or dependents.” Morrissey conceded that these same expenses (third-party egg donation and surrogacy) would not be deductible if his sexual orientation had been different. However, in contrast, a woman undergoing IVF for herself – or even using an egg donor with intent to have resulting embryos transferred to her — could deduct related expenses. Morrissey just needed a uterus to enjoy the same tax treatment.

For an excellent analysis that disagrees with the holding of the case – and argues that the medical expenses were indeed for the taxpayer’s dependents (his child-to-be!) — check out this blog post by Shaun Terrill of Bloomberg BNA.

Overall, LGBT couples may have won a hard-fought victory on the marriage front. But it looks like there are other long battles ahead. So if you are LGBT and want kids, it’s time to call your local ART attorney, as well as your tax lawyer. Oh, you don’t have a tax attorney yet? You may need one soon.

Ellen Trachman is the Managing Attorney of Trachman Law Center, LLC, a Denver-based law firm specializing in assisted reproductive technology law, adoption, and estate planning, and Co-Director of Colorado Surrogacy, LLC, a surrogacy matching and support agency. You can reach her at