Zombie awareness is finally sinking in. Even tax attorneys are getting it. Professor Adam Chodorow is Chair of the Teaching Tax Committee of the ABA’s Tax Section and on the Council of the Tax Section of the State Bar of Arizona. Wow. That is like being a tax attorney’s tax attorney. He recently wrote an article titled Death and Taxes and Zombies for the Iowa Law Review. He is clear about what we will be facing and the responsibility of tax professionals in the coming crisis:
The U.S. stands on the precipice of a financial disaster, and Congress has done nothing but bicker. Of course, I refer to the coming day when the undead walk the earth, feasting on the living. A zombie apocalypse will create an urgent need for significant government revenues to protect the living, while at the same time rendering a large portion of the taxpaying public dead or undead. The government’s failure to anticipate or plan for this eventuality could cripple its ability to respond effectively, putting us all at risk.
This article fills a glaring gap in the academic literature by examining how the estate and income tax laws apply to the undead. Beginning with the critical question of whether the undead should be considered dead for estate tax purposes.
Professor Chodorow gives us a thorough analysis of the question of how dead the undead really are. I may have been overly focused on plague type zombies, which are arguably merely human bodies revivified by a virus that allows for minimal brain function, enough to move about, moan and chomp brains, spreading the disease in the process. Professor Chodrow distinguishes between zombies controlled by others and those which/who are “self-motivating”. Within the self-motivating there is actually a wide range. Some retain some of the original personality associated with the host body. The most important distinction from a legal perspective seems to be whether you have to die and be revivified or make a seamless transition from living to undead without passing through dead.
The estate tax is sometimes referred to as the “death tax”, being as how in order to assess it the government needs to have a dead person whose property and certain inter-vivos transfers will be subject to tax. Professor Chodorow notes that the definition of death, which varies, has generally been left to the states. Broadly speaking though, there has been a tendency to move from a focus on heart function to brain function. The move away from agriculture has perhaps caused us to value the tin man over the straw man. The problem is a knotty one:
It seems a stretch to conclude that those who transform seamlessly into zombies should be considered dead. They never lose heart or brain function, though they now function quite differently from before. While it might be tempting to declare them dead, significant line-drawing problems would arise as one tried to distinguish between zombies and those who have suffered some mental or physical breakdown. Put differently, were such zombies to be considered dead because they suffered a personality change, physical disability, or decreased brain function, the door would be open to declaring dead a wide range of people currently considered to be alive.
There is a lot more to it and I recommend that you read the full article. One important policy recommendation included in the article is a uniform federal definition of death that addresses the various forms of undeadness. Of course, the uniform federal definition of marriage has not been doing so well in the courts, which brings us to another interesting point in the article.
What if your bride becomes a vampire ?
The Defense of Marriage Act (DOMA) provides that for federal purposes a marriage has to be between a man and a woman. If the woman, for example, becomes a vampire is she still a woman under DOMA, allowing the marriage to still be recognized for purposes of filing a joint return ? Even if we allow for the idea that a vampire remains human while in human form, there is still the issue of status while in the form of an animal. This could open the door for abusive tax planning maneuvers, such as turning into a bat on December 31 to allow a spouse to file as single.
Professor Chodrow raises many questions and provides few answers, but his article still has value. His conclusion hits the nail on the head (or perhaps more aptly the zombie in the brain case):
Over the past several years, Congress has found itself locked in a form of partisan rigor mortis. There is no reason to believe things will improve when half of them have been turned into zombies and rigor mortis sets in in earnest. Congress should act now to address this looming crisis, before it is too late.
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Originally published on Forbes.com on July 3rd, 2012