Originally published on Forbes.com June 27th, 2013
I have been following LGBT tax issues from the dawn of my blogging career. One of my earliest posts was on the then obscure CCA 201021050, which required registered domestic partners, and by logical extension same-sex married couples, in community property states to combine and then divide equally their incomes. I followed that with Just Because They Won’t Let You Do it Doesn’t Make it a Good Idea, in which I explored the tax advantages of a committed couple not being married.
There I introduced Robin and Terry, a mythical couple of indeterminate gender and sexual orientation, whose purpose is to help me avoid awkward pronoun problems. One of the high points of my former blog was having a post reprinted by Bay Windows, (New England’s premiere LGBT paper. The only thing better would be to be interviewed by Ellen DeGeneres an ambition that has eluded me. Suze Orman would be cool also.
DOMA Is Unconstitutional
At any rate, it is a little embarrassing that I was otherwise occupied when the Windsor decision was released. Since all the other tax bloggers are all over it, I was thinking about skipping it. My covivant pointed out, though, that my readers might be relying on me. OK guys, the Supreme Court has ruled that DOMA is unconstitutional:
DOMA’s history of enactment and its own text demonstrate that interference with the equal dignity of same-sex marriages, conferred by the States in the exercise of their sovereign power, was more than an incidental effect of the federal statute. It was its essence. BLAG’s arguments are just as candid about the congressional purpose. DOMA’s operation in practice confirms this purpose. It frustrates New York’s objective of eliminating inequality by writing inequality into the entire United States Code.
DOMA’s principal effect is to identify and make unequal a subset of state-sanctioned marriages. It contrives to deprive some couples married under the laws of their State, but not others, of both rights and responsibilities, creating two contradictory marriage regimes within the same State. It also forces same-sex couples to live as married for the purpose of state law but unmarried for the purpose of federal law, thus diminishing the stability and predictability of basic personal relations the State has found it proper to acknowledge and protect.
There is a lot of lawyerly stuff in the decision about whether the Court should have heard the case, since DOJ had already thrown in the towel.
Justice Scalia Is Not Happy About The Decision
My fellow Son of Xavier, Antonin Scalia, did not like the majority decision one little bit:
This case is about power in several respects. It is about the power of our people to govern themselves, and the power of this Court to pronounce the law. Today’s opinion aggrandizes the latter, with the predictable consequence of diminishing the former. We have no power to decide this case. And even if we did, we have no power under the Constitution to invalidate this democratically adopted legislation. The Court’s errors on both points spring forth from the same diseased root: an exalted conception of the role of this institution in America.
As I have observed before, the Constitution does not forbid the government to enforce traditional moral and sexual norms.
A reminder that disagreement over something so fundamental as marriage can still be politically legitimate would have been a fit task for what in earlier times was called the judicial temperament. We might have covered ourselves with honor today, by promising all sides of this debate that it was theirs to settle and that we would respect their resolution. We might have let the People decide.
But that the majority will not do. Some will rejoice in today’s decision, and some will despair at it; that is the nature of a controversy that matters so much to so many. But the Court has cheated both sides, robbing the winners of an honest victory, and the losers of the peace that comes from a fair defeat. We owed both of them better. I dissent.
I thought Justice Scalia might have already thrown in the towel, since in his dissent in Lawrence v Texas, he more or less said that if we can’t prosecute them for sodomy, we might just as well let them get married:
If moral disapprobation of homosexual conduct is “no legitimate state interest” for purposes of proscribing that conduct…what justification could there possibly be for denying the benefits of marriage to homosexual couples exercising “the liberty protected by the Constitution”? Surely not the encouragement of procreation, since the sterile and the elderly are allowed to marry.
I don’t know about the sterile, but personally, I think it would be a good idea if the elderly were not allowed to marry, but that’s just me as I’m getting elderly.
Let’s Get Practical
I have put up several posts encouraging couples to get protective refund claims in, in the event that filing a joint return would have saved them money. Most people should take a breather before doing anything in light of this decision, since there is a chance that the IRS might create some sort of expedited process. An exception would be someone who extended a 2009 return, but did not wait until October 15, 2010 to file it. You may have a statute of limitations problem. Of course, as one of my readers, you have your protective claim in.
If being married would cost you, as it does many people, you might want to think about getting an extended single return for 2012 done sooner rather than later.
Finally, before you rush to file a joint return, do not forget the dark side of joint returns. Joint and several liability. Even if a joint return lowers the amount of tax due, that is no help if the tax due is not paid. It is possible to love someone very much and think that they tend to be financially sketchy and if you are financially sketchy, yourself, it is better to keep your spouse out of it. It is really all around better for a couple, if IRS collections is only chasing one of you.
Professor Cain Has Not Spoken
The only tax blog coverage of LGBT issues that has been more thorough than mine is Santa Clara Same Sex Tax . Professor Patricia Cain has not yet posted her analysis of the decision, so I will be suspending judgment on a lot of complicated issues. For example: Might registered domestic partners be considered to be spouses for federal tax purposes ? What is the situation for federal tax purposes of a couple that legally married in Massachusetts, for example, but then changed domicile to a state that does not recognize same sex marriages at all ?
It Is Not Just About Taxes
Although taxes may be the issue that affects the greatest number of same-sex couples, it might not be the most important. Gay & Lesbian Advocates & Defenders (GLAD), which played a huge role in this victory, has guides available on a host of issues such as social security and veteran’s benefits.
You can follow me on twitter @peterreillycpa.