TaxProf Blog

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Pepperdine University School of Law

Tuesday, July 14, 2009

Tax Court Rejects Gay Activist's Attempt to File Joint Return With Long-Term Partner

Merrill From my prior post, Charles Merrill Raises First Amendment Challenge to DOMA in Tax Court:

Charles Merrill has filed papers with the U.S. Tax Court objecting to the Defense of Marriage Act (DOMA) based on the 1st Amendment Establishment Clause of the U.S. Constitution. He objects to not getting all the same benefits as other married couples -- 1,138 of them -- under a discriminatory tax code.

The Tax Court yesterday summarily dismissed Mr. Merrill's claims.  Merrill v. Commissioner, T.C. Memo 2009-166 (July 13, 2009):

We must decide whether petitioner, who was unmarried but in a committed relationship with another man during the years at issue, is entitled to married filing joint status. We hold that he is not. ...

Petitioner is a well-known gay rights activist and artist and a millionaire. He is the cousin of the founder of Merrill Lynch and was married, for 23 years, to the late Evangeline Johnson Merrill, an heiress to the Johnson & Johnson Company. Petitioner began a relationship with Kevin Boyle shortly after petitioner's wife passed away. He and Mr. Boyle have been together for more than 18 years.

Petitioner and Mr. Boyle lived in North Carolina during the years at issue. They participated in a commitment ceremony in 2004, but North Carolina did not recognize same-sex marriages. Petitioner and Mr. Boyle were legally married in 2008 after moving to California.

Petitioner failed to file a tax return for either of the years at issue. Respondent contacted petitioner about filing income tax returns. Petitioner responded with a letter stating that he was not evading taxes, but refused to pay taxes as an act of civil disobedience advocating same-sex marriage equality. Respondent prepared substitutes for returns for the years at issue and issued deficiency notices to petitioner. In the substitutes for returns, respondent determined petitioner's filing status to be single. Petitioner resided in North Carolina when he filed the first petition regarding his return for 2004, and he resided in California when he filed the second petition regarding his return for 2005.

In both petitions, petitioner argued that he must be accorded married filing joint status, rather than single status, because of his long-term domestic partnership with Mr. Boyle. Respondent filed motions for partial summary judgment on whether petitioner is entitled to married filing joint status for the years at issue. Respondent argues that petitioner is not entitled to this status because he was not married in the years at issue and he did not file a joint return for those years. We agree and discuss each of respondent's arguments in turn.

We must decide whether petitioner is entitled to married filing joint status for the years at issue. Petitioner was not married during the years at issue. He was not married under the laws of the State of his domicile, North Carolina, nor in any other State. Moreover, petitioner did not file a return for the years at issue and, therefore, is not entitled to married filing joint status.

We turn now to married filing joint status. Every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013 is subject to married filing joint return status. Sec. 1(a)(1). The determination of whether an individual is married shall be made as of the close of the taxable year. Sec. 7703(a)(1). Whether a taxpayer is married for Federal income tax purposes is determined by reference to the laws of the State of the taxpayer's marital domicile. ...

Petitioner admits he was not legally married for either of the years at issue but argues, nonetheless, that he should be allowed to file joint returns because he was in a long-term committed relationship with his gay partner and North Carolina did not recognize same-sex marriage. Despite petitioner's argument, a taxpayer must file a joint return with his or her spouse and it must be signed by both spouses to claim the married filing joint status. ...

Here, petitioner never filed a return for the years at issue. Accordingly, he is not eligible for married filing joint status with respect to these years.

Petitioner further argues that the Internal Revenue Code discriminates against same-sex couples in a manner that violates their constitutional rights by not allowing them to file joint tax returns. [Fn.2]

Fn.2: Petitioner also challenges the constitutionality of the Defense of Marriage Act (DOMA), Pub. L. 104-199, 110 Stat. 2419. DOMA has no bearing on petitioner's filing status, and its constitutionality is irrelevant to our holding.

We need not address his constitutional claims. [Fn.3]

Fn.3:  Similar constitutional challenges brought by same-sex couples, married persons, and single persons have been consistently denied. See Mueller v. Commissioner, 39 Fed. Appx. 437 (7th Cir. 2002) (same-sex couple), affg. T.C. Memo. 2001-274; Druker v. Commissioner, 697 F.2d 46 (2d Cir. 1982) (married persons), affg. in part and revg. in part 77 T.C. 867 (1981); Demars v. Commissioner, 79 T.C. 247 (1982) (married persons); Kellems v. Commissioner, 58 T.C. 556 (1972) (single person), affd. 474 F.2d 1399 (2d Cir. 1973); Mueller v. Commissioner, T.C. Memo. 2000-132 (same-sex couple), affd. without published opinion 2001-1 USTC par. 50,391 (7th Cir. 2001); Brady v. Commissioner, T.C. Memo. 1983-163 (single person), affd. without published opinion 729 F.2d 1445 (3d Cir. 1984); see also Mapes v. United States, 217 Ct. Cl. 115 (1978); Jansen v. United States, 567 F.2d 828 (8th Cir. 1977); Barter v. United States, 550 F.2d 1239 (7th Cir. 1977); Johnson v. United States, 422 F. Supp. 958, 967 (N.D. Ind. 1976), affd. sub nom. Barter v. United States, 550 F.2d 1239 (7th Cir. 1977).

We conclude that respondent properly determined single filing status for petitioner. Accordingly, we hold that petitioner is not entitled to married filing joint status for the years at issue.

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Comments

Now that Mr. Merrill is married under the prior laws of California, will he and Mr. Boyle be allowed the MFJ filing status?

http://taxlaw.typepad.com/tax_law/2009/07/tax-court-denies-domestic-partners-mfj-status.html

Posted by: gcwright | Jul 14, 2009 8:03:36 AM

There will sooner or later be joint returns by gay couples whether the IRS likes it or not.

Posted by: Michael A. Livingston | Jul 14, 2009 8:46:01 AM

The court apparently decided on a technicality - he didn't claim MFJ status because he didn't file a tax return. I wonder if, in a two-income family that has previously filed MFJ and then not filed the next year, whether the IRS gives the two taxpayers single filing status or assumes they're still MFJ. That would be an interesting assumption. Anyone with experience have an answer?

I guess the guy should have filed a tax return, then simply not paid it. Well, he's rich and probably just does what he wants.

Next question - does the IRS collect from this guy or does he just flout the law by not paying his taxes?

Posted by: procedure | Jul 15, 2009 4:28:19 AM

The IRS didn't like Mr. Merrill filing jointly because A.) he didn't claim MFJ for the years in question (he did this by not filing) and B.)according to the state law and his admission he was not married for the years in question. It was not because he was gay. It would be like if I got married this year and claimed MFJ for last year because I was living with my fiancee at the time and I was in a long-term committed relationship.

Posted by: James | Jul 15, 2009 8:07:40 AM

Interesting. So for tax year 2008, legally married same-sex partners in the various states recognizing gay marriage can claim MFJ. If the claims of MFJ status is then denied due to DOMA, it seems the constitutionality question would have to be addressed. Well, the Massachusetts lawsuit likely will address it too.

Posted by: it doesn't matter whom | Jul 15, 2009 9:32:20 AM

legalizing gay marriage would create more "marriage penalty" tax revenue - discuss

Posted by: J | Jul 15, 2009 10:01:58 AM