Taxing The Human Body

Feminist Law Professor Bridget Crawford has a cool new paper up on SSRN, Taxation, Pregnancy and Privacy.  My tax colleagues will be thrilled that I now have a source (other than pestering them) for my constant questions about the potential tax implications of the growing markets in virginity, medical marijuana, and other strange goods and services.

Though primarily an exploration of the tax implications of surrogacy markets, Crawford also investigates a wide variety of commercial transactions involving the human body, including blood, hair, breast milk, plasma, sperm, and the wearing of tattoos (temporary and permanent) for compensation.  As Crawford notes, “[i]ncome tax concepts apply awkwardly to the human body.”  So awkwardly, in fact, that “one gropes for apt (if inelegant or even offensive) analogies.”

This awkwardness is readily demonstrated by the quotes from case opinions that Crawford marshals.  Says Crawford, “[a]t least one court has opined that human blood is no different, in a tax sense, from ‘hen’s eggs, bee’s honey, cow’s milk, or sheep’s wool for processing and distribution.’”  And according to another, “[m]ilk is a commodity, whether from a human being or a cow.”

Applying this logic to commercial surrogacy, Crawford argues that, from an economic perspective, there is no difference between a surrogate and someone who agrees to wear an advertising tattoo.  Both taxpayers put their bodies to an agreed-upon use for compensation, receiving income in the process.

Despite the clear status of surrogacy compensation as taxable income, Crawford finds signs of noncompliance in surrogates’ reporting of that income.  She contends that many surrogates do not understand their reporting obligations and those that do often reject the characterization of their surrogacy proceeds as income. (A phenomenon she discusses in greater detail in Taxing Surrogacy).  She advocates remedying this situation through clear IRS guidelines regarding the tax treatment of surrogacy proceeds and the obligation of surrogacy agencies to issue Form 1099s to surrogates that will prompt compliance with reporting obligations.

Crawford recognizes the potential downside to enforcing income tax reporting by surrogates – equating commercial surrogacy with other forms of work risks disrupting the altruism narrative that renders commercial surrogacy socially acceptable for surrogates themselves, intended parents, and society at large.  She concludes, however, that “[o]f all the unanswered (and unanswerable) questions about surrogacy, taxation is not one of them.”  The IRS should enforce and collect taxes due on surrogacy payments.

For those seeking potential income opportunities but are squeamish about selling their bodily fluids and tissues or reproductive capacity, make sure to check out leaseyourbody.com as an alternative: 

a revolutionary way of advertising! Our Participants agree to wear temporary tattoos (logos) supplied by Advertisers. By doing so, YOU can earn BIG $$$$$.  In exchange, Advertisers (companies) can gain novel exposure for their business.

Top Image: Kari Smith, who reportedly auctioned her forehead space on eBay in order to pay for her 1-year-old son’s private education. Goldenpalace.com, an Internet gambling company, spent $10,000 to have their website address tattooed on Smiths forehead.

Prior Related Posts:
Like A Virgin? We Sell That Here!
The Antebellum Market and Empowerment

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