Articles Posted in Same Sex Tax Issues

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In Revenue Ruling 2013-17, the IRS has now had the opportunity to delve further into the question of what now since the fall of the Defense of Marriage Act? The IRS proceeded to answer a series of questions, but the most question I found addressed in RR 2013-17 was the following: Whether, for Federal tax purposes, the terms “spouse,” “husband and wife,” “husband,” and “wife” include individuals (whether of the opposite sex or same sex) who have entered into a registered domestic partnership, civil union, or other similar formal relationship recognized under state law that is not denominated as a marriage under the laws of that state and whether, for those same purposes, the term “marriage” includes such relationships.” In other words, since for years the biggest commitment same-sex couples could make was entering into a “registered domestic partnership”, does the IRS now consider registered domestic partners as being married couples for tax purposes? Or do those couples now have to go actually get married to be deemed married for federal tax law? Let’s take a look at that question, and a couple others brought up by the revenue ruling.

Issue One- Are same-sex couples Who Have Actually Married Considered Married for the IRS Purposes?

Well, we know the answer to this one already. If the same-sex couple is married in any state where same sex marriage is legal, no matter what state their domicile is, they are considered married for federal tax purposes (and that’s great for estate planning, where the unlimited spousal deduction is now available for same sex spouses).

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We’ve held off a little starting our same-sex tax blog, because until the IRS finally chimes in on the impact of the post-DOMA world, there really wasn’t much more to do other than speculate on the impact. But with the first pronouncement from the IRS since DOMA’s demise, we finally have some concrete rules from which we can advise our clients. On August 29th, the IRS issued Revenue Ruling 2013-72 which gives us the IRS’ perspective (the Federal perspective, not the state of California’s perspective) on what the fall of DOMA means. In this first part of this series, let’s take a look at the IRS’ rules on what constitutes a marriage:

Rev. Rul. 2013-72 Says That The IRS Will Recognize Your Same-Sex Marriage As Long as You Were Married in a State Which Recognized Same-Sex Marriage.

So what is the IRS saying here? They’re saying, as long as you are actually married in a state where same-sex marriage was legal at the time of the marriage (i.e., the state which issued you the marriage license, where the service was) then the IRS will view you as legally married for IRS (federal) purposes (the significance of this we will discuss later posts on this topic). If a same-sex couple was married in California, but lives in Oklahoma (the couple’s “domicile”), the IRS does view the Oklahoma couple as legally married for its purposes.