TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Wednesday, June 22, 2005

IRS Rules that Qualified Plan Cannot Provide Benefits to Same-Sex Domestic Partners

Irs_logo_104 In companion rulings issued last week (Priv. Ltr. Rul. 200524016 & Priv. Ltr. Rul. 200524017), the IRS ruled that a county's collectively bargained deferred compensation plan must be interpreted to deny benefits to same-sex donestic partners in order to constitute a qualified plan for § 457 purposes.  The Service ruled that the plan could not circumvent the federal Defense of Marriage:

Rev. Rul. 58-66, 1958-1 C.B. 60, provides that the marital status of individuals as determined under state law is recognized in the administration of tax laws. However, Section 3 of the "Defense of Marriage Act", P.L. 104-199 (September 21, 1996), provides that, "in determining the meaning of any Act of Congress, or of any ruling, regulation or interpretation of the various administrative bureaus or agencies of the United States, the word 'marriage' means only a legal union between one man and one woman as husband and wife, and the word 'spouse' refers only to a person of the opposite sex who is a husband or a wife."...

A registered domestic partner, a former registered domestic partner, or a surviving registered domestic partner as defined in state X Act is not a spouse, a former spouse or a surviving spouse for purposes of § 457. Accordingly, in the event that the Spouse Provisions are not interpreted and applied in a manner consistent with the Defense of Marriage Act, the operation of the Plan will not be in compliance with § 457(b).

The IRS described the state law as follows:

State X Act provides that registered domestic partners have the same rights, protections and benefits and are subject to the obligations and duties “under law” as granted to and imposed on spouses. Likewise, former registered domestic partners and registered surviving domestic partners have the same rights, protections and benefits and are subject to the obligations and duties under law as granted to and imposed on former spouses and surviving spouses. To the extent that provisions of State X law adopt, refer to, or rely upon, provisions of federal law in a way that otherwise would cause registered domestic partners to be treated differently than spouses, registered domestic partners are to be treated under State X law as if federal law recognized a domestic partnership in the same manner as State X law. Accordingly, if applicable with respect to the Spouse Provisions, State X Act requires that a domestic partner be treated in the same manner as a spouse under Plan A. However, State X Act expressly provides that it does not amend, or modify federal law or the benefits, protections and responsibilities provided by federal law.

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