Quatloos!

Yesterday, SCOTUS, overturned (section 3) of the Defense of Marriage Act.

[NOTE: discussions of whether the act should be in effect are off-limits as politics.]

As, under federal income tax law, married people are not (usually) allowed to file as single, should same-sex married couples file new returns for all open years, even if it might cost them money?

For that matter, why restrict it to open years. If the effect of the ruling is retroactive, it should apply to all years, open or not.

Comments?

(And, remember, be careful of politics.)

Arthur Rubin wrote:(And, remember, be careful of politics.)

Unfortunately, your advisement was ignored and the next two responses did not address your question related to taxes, and instead went the political route. Thus, their removal.

For those who wish to respond to this topic, please frame your answer regarding the tax implications of the Supreme Court ruling, and not reference opinions about who or what political movement is angry or unhappy about the ruling.

This question isn't about the tax implications, but about the full faith and credit issue. My next door neighbors are in a same-sex marriage; and if they decide to move to a state which, under its constitution, recognizes only opposite-sex marriage, would that state be bound to recognize the validity of a same-sex marriage?

This decision, presumably undoing DOMA and its denial of full faith and credit among states for same-sex marriages, will lead to intriguing changes in the tax and inheritance consequences. Until today the IRS would not allow same-sex partners, even when formally married in a state that provided for that, to file jointly or otherwise be treated as spouses. Presumably that will have to change. Also, in cases of inheritance - there were tax differences between the taxation of a surviving spouse and a mere legatee. Additionally, the DOMA denial of full faith and credit for same-sex marriages meant that the surviving partner might not be able to inherit as a widow[er] any property in another state (or possibly even the same state), nor inherit the widow's portion of federal benefits such as SocSec or federal pension. I also expect changes there.

One complication ... the handful of states that still provide for common law marriage; can two guys living together (without marrying) find themselves - perhaps not willingly for both - regarded as being married to each other, so that the only way either could legally marry anyone else would be going through divorce court, with the possibility of having to pay alimony, etc.?

Your last observation is NOT a complication. Even in those few states which allow one to enter into a common-law marriage, the couple must put themselves forth as married and intend for their association to be recognized as a marriage. Mere co-habitation cannot result in an unintended common-law marriage.

The SCOTUS decision only overturned section 3 of DOMA, covering Federal recognition. The section allowing a state not to recognize a same-sex marriage from another state is still in effect. Some of the posts seem to assume that that part of DOMA was also overturned.

Arthur, I think, at least from my observation, that most people assume the entire Act was overturned. There was a lot that is still in place. As far as taxes my question would be would the IRS be bound to recognize the marriage? Nothing I have seen forces any agency to recognize the act of marriage. So would there be something else changing later?

I'm trying to puzzle out the practicalities of how this will all work at tax return time when a married gay couple breaks up.

Moe and Curly Joe get married in a state that recognizes gay marriage. They file federal income tax returns "Married filing jointly." Eventually Curly Joe gets tired of Moe whacking him, moves out, does NOT file for divorce, but moves to a state which does not permit gay marriage.

What are Moe's and Curly Joe's federal tax return filing status on the next April 15th? Does Moe have to file "Married filing separately" because he still lives in the state where he legally married Curly Joe, while Curly Joe gets to file "Single" because his new state of residence doesn't permit gay marriage?

And if Curly Joe gets to change his federal tax filing status to "Single" because he moved to a new state, why can't estranged opposite sex couples do the same thing?

Yes indeed, this is going to make interesting entertainment.

THAT is exactly where the issue that will force ALL states to recognize gay marriage comes in. The particular portion of DOMA allowing individual states to recognize or not same-sex unions was not ruled upon because it was not part of the case brought before the Court. Clearly, other provisions will now be ruled upon, and if SCOTUS refuses to rule, the Circuits will set up the rules. Again, look to "common-law" marriage. If a couple is domiciled in a "common-law" state for the required period, then moves to a state that does not allow marriage to be contracted under "common-law" ; THEY ARE STILL MARRIED and that marriage can only be dissolved by divorce proceeding in the state where they are domiciled. This issue is already arising with relationships validly entered into in a state recognizing gay marriage where the couple has moved away, and now seeks to dissolve the relationship. If their current state does not recognize that they are married, they cannot obtain a decree of divorcement. For a while, things will be ugly. It will take time, but the issues will sort themselves out. Eventually, every state will be forced (by Federal law) to recognize as legal and valid marriages entered into in any state.

LaVidaRoja wrote:Your last observation is NOT a complication. Even in those few states which allow one to enter into a common-law marriage, the couple must put themselves forth as married and intend for their association to be recognized as a marriage. Mere co-habitation cannot result in an unintended common-law marriage.

About 30 years ago, when I was practicing law, a woman came to me to get help in filing for a divorce. During the intake interview, I asked the woman when she and her husband were married. Her response was on the order of "we weren't officially married. We lived together for 8 years; and when I said that I wanted to get married, my husband said 'we're already married under common law.'" I informed the woman that, under Massachusetts law, common law marriage was not recognized; and thus she did not need (and could not get) a divorce because she wasn't legally married. Decorum prevents me from repeating what she said next, and also after I told her about the difficulty in getting "palimony".

I'd be very surprised if we don't see a Revenue Ruling very soon to clarify this; I think it'll be that a legal marriage under state law will allow the joint filing status. Including years where the refund statute is still open, provided the marriage took place prior to or within said year.


Still coping with the intense incompetence of Comcast, who opened an account for someone (a thief) in my name. My life and credit suck, but at least I like these socks I'm wearing.

Cathulhu wrote:I'd be very surprised if we don't see a Revenue Ruling very soon to clarify this; I think it'll be that a legal marriage under state law will allow the joint filing status. Including years where the refund statute is still open, provided the marriage took place prior to or within said year.

Oh the IRS loves couples to file jointly, and particularly loves it when a couple who filed separately decides to refile jointly. It gives them two people to attach for a tax debt regardless of who earned the income. So permitting joint filing isn't going to be a big issue. Just don't bother trying to refile separately after you've filed jointly when you discover that your spouse screwed you over by lying about his/her income. THAT'S not allowed.

Even if the married gay couple moves to a non-gay-marriage state, they could presumably still file a federal tax return "married filing jointly" while filing their state tax returns "single." Not a real big problem there. The states make their own rules regarding income tax filing status.

No, the real issue here is not the marriage. It's the breakup of the marriage, particularly when one or both parties to that marriage moves to a different state where the marriage is illicit. Should a gay couple be forced to keep filing federal tax returns as "married" when they now live in a state which doesn't recognize their marriage and therefore won't grant them a divorce? Should the state where they were originally married, and in which they no longer reside, be forced to change its residency rules to allow them to pursue a divorce action even though they live 1,000 miles away? Can a gay married couple break up and merely declare themselves unmarried without a divorce decree, and change their federal tax filing status, if one or both resides in a non-gay-marriage state? And if gay couples can do THAT, why shouldn't non-gay couples be afforded the same privilege?

Pandora's box has been opened with a halberd, and there's no closing it now.

Throw in a generous dose of Community Property laws and we'll have a real party. Even opposite-sex couples have fun with that one, when estranged spouses reside in different states and one of the states is Community Property.

Canada has recognized gay marriages for a while now, both nationally and in the individual provinces. They now have the same rights and responsibilities as traditional married couples which has plus and minuses (complaints about how much trouble it is to get divorced and support issues, welcome to the club). As far as taxes go Canadian taxpayers all file federal tax individually so no issue about having to chose either joint or single and being stuck with the consequences. The federal government allows the same benefits to the spouse of an employee in a gay marriage as they do to the spouse in a traditional marriage. The big ones are health plans and pension benefits. I don't know about the provinces. Gay marriage was never as contentious an issue here as it is in the states.

Isn't there precedent for all of this in the handling of miscegenation laws? There was certainly a time when interracial marriages were recognized federally, but not in every state.

One of the peculiar facts about the laws of marriage is that, in the various states, there are differing prohibitions on who can marry who. Usually this area of variance is limited to close relations, specifically first cousins. As far as I know, second cousins can marry anywhere but only some states permit first cousins to marry. Litigation on this issue is rare and mostly very old cases, but the legal trend among states is that, if first cousins marry each other in a state in which that is legal and then they move to another state that does not allow first cousins to marry, their marriage is recognized as legal in the second state and there's no quibbling about.

Pretty much the same thing regarding the age of consent. If 17-year-olds are permitted to marry on their own decision in some states and not others, then 17-year-olds who get married where they are permitted to and then move to another state that has a higher age limit, the second state recognizes their marriage as completely valid notwithstanding it wouldn't have allowed the wedding to take place there.

I think this may apply - in light of the recent Supreme Court decision - in the case of same-sex marriages as well.

notorial dissent wrote:The sticking point here is the still operative section of DOMA that prevents the states from recognizing within their borders what would be and is a valid and legal marriage in some other jurisdiction.

I could be wrong, but I thought section 2 only allows states not to recognize same-sex marriages which were legal where solemnized; it doesn't require states not to recognize them.

I agree it's almost certainly a violation of the equal protection clause, and probably the full faith and credit clause. I say "probably", because the clause allows Congress to determine the extent to which states must give credit to other states' laws; and they nominally determined that no credit must be given to same-sex marriages.

But what do I know? I didn't complete a full year of law school.

Arthur Rubin wrote:I agree it's almost certainly a violation of the equal protection clause, and probably the full faith and credit clause. I say "probably", because the clause allows Congress to determine the extent to which states must give credit to other states' laws; and they nominally determined that no credit must be given to same-sex marriages.

When you have one state which permits an action, and a neighboring state which prohibits the same action, which state has to give credit to the other's laws?