Weekly Round-Up: Amending Returns in the Wake of “Windsor”

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…

Multistate Tax Alert: Texas Tax Legislation Amends Franchise Tax, Adds New Credits and Sales/Use Tax Exemption , by Deloitte Tax.

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

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