The use of surrogates to have a baby is a controversial issue that has been contested by the IRS for years. In principle, tax analysis believe that all of the surrogate's medical expenses, insurance expenses, agency fees, legal expenses, any fee to the surrogate, etc. would all be tax deductible medical expenses. However, it may vary from case to case and, which means that surrogacy expenses are not deducted in all cases, both in cases of gay and straight intended parents.