Internal Revenue Service: Friends of Ellen

By Joseph J. LaCosta, Esq., CPA
Attorney of Counsel
Carluccio, Leone, Dimon, Doyle & Sacks, LLC

In light of the recent United States Supreme Court opinion in United States v. Windsor in which the U.S. Supreme Court struck down the Defense of Marriage Act (“DOMA”), the Treasury Department has issued Revenue Ruling 2013-17 (“Ruling”) indicating who is treated as married for federal tax purpose (eligible to file a joint federal income tax return, among other things).   The quick synopsis of that ruling is that any same sex couple that is validly married, regardless of whether the marriage license was obtained in the state in which that couple lives, is treated as married for federal tax purposes.

The significance of this Ruling, which is probably the first in a series of rulings addressing the impact of the Windsor case on federal tax issues (including estate and gift taxes and the retroactive impact of Windsor on the income taxation of benefits), is much greater than might have been expected since it recognizes marriages which are valid, but not obtained in the domicile state.  A same sex couple validly married in a state other than New Jersey may file a joint federal tax return and is treated as “married” for all purposes of the federal income tax code.  The Ruling applies prospectively as of September 16, 2013, which means that same sex couples who meet the definition in the Ruling will be treated as married for 2013 since the Internal Revenue Code requires that a couple be married on the last day of the tax year.  It also means that a same sex couple that met the definition in the Ruling in 2012 will not be eligible to file an amended federal income tax return for 2012 due to the prospective application.  Therefore same-sex couples domiciled in New Jersey who were married in a “marriage recognizing state” will be treated as married for federal tax purposes, and as civil union for state tax purposes.

The Internal Revenue Service (“IRS”) intends that tax preparers treat same sex couples and opposite sex couples the same, so CPAs and other professionals who prepare federal income tax returns should not need to adopt any new procedures regarding the documentation they retain in their files.  It is important to note that all taxpayers sign their federal (and state) income tax returns under penalties of perjury, so they must take their responsibility to provide accurate information seriously no matter what that information might be.  I would expect that anyone now eligible to file a joint federal income tax return will evaluate whether it is advantageous to do so.

If you would like further information regarding federal or state tax law, contact Joseph J. LaCosta, Esq. at jlacosta@cldds.com.  If you have questions regarding entering into a same-sex marriage, civil union, or domestic partnership, please contact Jonathan Z. Petro, Esq. at jpetro@cldds.com.  Both attorneys can be reached by calling our office at 732-797-1600.

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