The U.S. Supreme Court’s finding in United States v. Windsor that the Defense of Marriage Act (DOMA) was unconstitutional will affect tax returns that same-sex couples have filed in the past and there may be an opportunity for amended returns and refunds, Nicole Pearl, a partner at McDermott Will & Emery LLP, explained in this week’s issue of the Weekly State Tax Report.
Same-sex couples who have created a legal marriage in any state will be able to go back and amend any income, estate, or gift tax returns in which the statute is still open (generally three years from the date of filing), Pearl said . This would allow couples to go back as far as their 2009 returns (assuming that they were filed on extension in 2010). Of course, there is no duty to amend tax returns so couples can decide based on their particular circumstances whether this would make sense for them, she said.
However, Pearl explained that this also gives rise to further questions. “For instance, are couples that registered as domestic partners or formed civil unions in their states of domicile because they were not allowed to marry in those states allowed to go back and amend their returns?” “Could they be considered to be married under federal law, or would they have to take some further step in order to legitimize their marriage (for example, obtain a marriage license).”
Pearl predicts that there will likely be a challenge to Section 2 of DOMA, which says that no state has to recognize a marriage performed in another state. “I also think that we will see some regulation from the federal government in the meantime, clarifying what all these changes mean,” she said.
For instance, the IRS could issue Treasury Regulations that say as long as you are validly married in one state, the federal government will recognize it no matter where you live afterwards, Pearl explained. Or they could say that for federal estate tax purposes, they are going to consider the law of the state that was your domicile as of the date of death. There may be different results in different areas of the law, since there will be regulations coming from all areas of the government, she said.
Pearl’s interview can be read in its entirety here .
In other developments…
New Tax Laws Take Effect July 1 , by Stateline, the Daily News Service of the Pew Charitable Trusts.
2013 State Sales Tax Holidays , by the Federation of Tax Administrators.
Monday Map: Percentage of Each State's Federal Tax Returns Filed Jointly , by the Tax Foundation.
Compiled by Priya D. Nair
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)