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.
Will the IRS Recognize Your Same-Sex Marriage if You Were Registered Domestic Partners Prior to the Fall of DOMA?
Of course, many same-sex couples at this point could not have been married in a given state, because same-sex marriage (prior to 2013) has only been legal in a handful of states. But maybe a same-sex couple instead for many years have been registered domestic partners in a given state. However understandable this situation might be, it does not matter in the eyes of the IRS. If you want to be treated by the IRS as married for tax reasons (and again, we’ll digest why you might in short order), you’re going to have to now go get married. Registered Domestic Partners and Civil Union Partners are not deemed by the IRS to be spouses.
Lastly, if I Get Married in a State Which Permits Same-Sex Marriage, but Live in Another State (which does not Permit Same-Sex marriage), Where am I permitted to get divorced?
Of course with marriage, there must be an avenue for divorce. So the final issue to address in Part I is the issue of divorce. In Part 2, we’ll get into the advantages and disadvantages of being deemed a married couple in the eyes of the IRS. So what happens now if a same-sex couple gets married in California, but lives in Oklahoma, and then wants to get in divorce? Oklahoma isn’t going to honor a divorce, it didn’t honor the marriage. The IRS honored the marriage because it was performed in California. Well, as you might expect, the IRS will honor a divorce entered into back in California, the same state the marriage took place. All the couple must do is show that the state of domicile (Oklahoma) will not grant the divorce, and California becomes eligible as a divorce jurisdiction which will be honored by the IRS.