Dissecting taxation of human body parts

Taxpayers often complain that the IRS seems to want an arm and a leg from them.

Well, it turns out that a pound of flesh (although usually much less) might one day literally be considered when it comes to taxation.

"Transfers of human body materials are ubiquitous. From surrogacy arrangements, to sales of eggs, sperm and plasma to clinics, to black markets for kidneys, to pleas for donations of body materials, these transfers are covered and debated daily in popular and academic discourse," writes Lisa Milot of the University of Georgia Law School.

But, adds Milot, current law is unclear about the tax consequences of these transfers.

"There are no statutory provisions directly on point, Internal Revenue Service guidance is outdated and conflicting, and the small number of judicial decisions in this area are narrowly written to resolve only the tax liability of the particular taxpayer before the court," says Milot.

The Wall Street Journal picked up on the issue, talking to Pace University tax professor Bridget Crawford, who says lack of specifics in the tax code reflect the "fundamental question of whether the human body is a product, or if it is something so special that it can't be taxed."

Thanks to TaxProf for being the first to direct us to this, uh, intriguing tax angle. You'll want to check out his latest post on body part taxation (that phrase sort of makes it sound like the Prof blogs about this rather ghoulish topic all the time, doesn't it?) for, among other things, the many comments from the legal community that it's generated.

And as WebCPA's Debits & Credits notes, a "transplant tax" may not be so far off after all.

Organ donation deductions: Rather than tax body part transfers, one state offers tax breaks in connection with organ donations.

Utah provides its residents who donate an organ may a potential $10,000 tax credit to help offset qualified expenses connected with the surgical procedure.

Other states offer charitable check-offs, by which taxpayers can make contributions directly on their state returns to various nonprofits. Again in Utah, one of the eligible organizations is the Kurt Oscarson Children's Organ Transplant Fund.

Related posts:

• Baby formula is not deductible
• From the "eeeewwwww" tax file
• A new twist on death and taxes
• Icky online offerings
  
• Tax breaks for organ donations

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