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Groups Urge IRS Not to Retroactively Apply 'Windsor' Decision to Retirement Plans

Thursday, December 12, 2013
By Kristen Ricaurte Knebel

Dec. 10 -- Expected guidance from the Internal Revenue Service on the application of the U.S. Supreme Court's decision in United States v. Windsor to retirement plans should be prospective in order to avoid compliance issues and administrative burdens, retirement and financial groups said in a letter to Treasury Department officials.

“Before the Court's decision in Windsor, retirement plans were being administered, with respect to the treatment of same-sex spouses, in accordance with DOMA, a Federal law. To now require plan administrators to retroactively administer such plans in order to maintain their tax-qualified status, as if DOMA never existed, would place a significant, complex, and costly burden on such plans,” the Dec. 9 letter said, referring to the Defense of Marriage Act.

The American Council of Life Insurers, ERISA Industry Committee, Financial Services Roundtable, SPARK Institute Inc. and the ESOP Association were among the groups that signed the letter. It was addressed to a pair of Treasury officials, J. Mark Iwry, senior adviser to the secretary and deputy assistant secretary for retirement and health policy, and George H. Bostick, benefits tax counsel in the Office of Tax Policy.

On Aug. 29, the IRS released Revenue Ruling 2013-17, which announced that the agency would recognize all legally married same-sex couples for federal tax purposes regardless of where the couple lived .

The revenue ruling also said that the IRS intends to issue further guidance on the retroactive application of the U.S. Supreme Court's decision in Windsor, which struck down a key part of DOMA .

“We strongly recommend that the Service utilize its authority” under tax code Section 7805(b)(8) “to limit the extent of the decision's retroactivity. Specifically, we recommend that the Service issue further guidance providing that it will not disqualify a retirement plan as a result of the plan's failure to administratively comply with the Revenue Ruling prior to its September 16, 2013 effective date,” the letter said.

To contact the reporter on this story: Kristen Ricaurte Knebel in Washington at

To contact the editor responsible for this story: Phil Kushin at

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