Lisa Milot


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. The associated philosophical and legal issues have been explored by a wide range of commentators. The appropriate tax treatment of these transactions, however, is mostly unexamined. Current Law is unclear about what the tax consequences of these transfers are. There are no statutory provisions directly on point, Internal Revenue Service guidance is outdated and conflicting, and the small number of judicial decisions in this area are narrowly written to resolve only the tax liability of the particular taxpayer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. Moreover, there are only afew academic publications on this topic, of which the most comprehensive is a 1973 student Note. This lack of legal clarity reflects in part the complexity of the issues involved Transfers of human body materials raise questions as to the appropriate tax treatment across multiple federal tax regimes, each of which is governed by a distinct set of rules and informed by different considerations of tax policy and history. Moreover, these tax issues are arising in the context of evolving jurisprudence involving human bodies more generally, and they implicate complex philosophical problems. Of particular significance in this debate is whether human bodies can only provide services, or if their materials can constitute property of the person from whose body they come: Whether the human body is exclusively a laborer, or if it can also be a factory or a collection of spare parts. What is more, the technology that has enabled these transfers continues to evolve rapidly, increasing the demand for human body materials and creating new markets for which no well-defined regulatory frameworks exist. In this Article, I offer a comprehensive methodology for handling the taxation of transfers of human body materials. To this end, I offer three principles for characterizing human body materials for tax purposes. This approach produces a workable set of doctrines that is consonant with our broader cultural and legal understandings, which I then apply to recurring forms of transfers of human body materials to illustrate the resulting tax treatment of these transfers.



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