Thursday, June 27, 2013
Yesterday was a historic day for advocates of marriage equality. Section 3 of the Defense of Marriage Act (“DOMA”) that provided the definition of marriage for federal purposes being a man and a woman was struck down as unconstitutional in United States v. Windsor. Section 3 of DOMA had prospectively invalidated marriages of same-sex couples for purposes of federal laws regardless if those laws were enacted prior to or subsequent of DOMA. More specifically, it provided:
In determining the meaning of any Act of Congress, or any ruling, regulation, or interpretation of the various administrative bureaus and 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 term “spouse” refers only to a person of the opposite sex who is a husband or a wife.
In Windsor, the Court, in an opinion by Justice Kennedy, rendered a 5-4 decision that opined: (1) that the Petitioner had standing to bring the case and (2) most importantly, for our purposes, that Section 3 of DOMA was unconstitutional because it denied same-sex couple “equal liberty” guaranteed by the Fifth Amendment. ...
The question that I was asked to discuss here is the impact that these cases have regarding the federal tax code (the “Code”). Unfortunately, I have more questions than answers at this point. Regardless, I will focus on the federal income tax implications to the ruling and endeavor to frame the issues that result from the decision. Essentially, DOMA was intended to avoid the questions that we are going to be faced with now regarding, among other things, the full-faith and credit issues between states. First, I will discuss the proper definition of marriage that should apply for the Code. Second, I will discuss how the Code might need to be modified. Finally, I will discuss some of the implications of the decision for taxpayers.