Paul L. Caron

Thursday, June 27, 2013

Herzig: The Tax Implications of Windsor

HerzigDavid J. Herzig (Valparaiso), The Tax Implications of Windsor:

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.

Tax | Permalink

TrackBack URL for this entry:

Listed below are links to weblogs that reference Herzig: The Tax Implications of Windsor :


Tax implications are of course interesting, but what leapt out for me on reading the opinion was the opinion's reference to Vicki Jackson as amicus curiae, as opposed to amica curiae. The latter term has been used, but not so often (although Jackson herself used it in her brief, as I understand it). According to my Latin dictionary, amica is a good Latin word, altho not used often in classical times. (Remember that we are talking about a noun here, so it is not as flexible as the adjective amicus, which would have both a feminine and neuter form.) Using "amicus" in a gender neutral way (i.e. regardless of whether a man, woman, or entity is the amicus) strikes me as a simple solution and probably appropriate for the U.S. court system. An analogy is "Senator" which is a masculine word in Latin. We don't use a feminine version of that word to refer to women senators.

Posted by: Victor Thuronyi | Jun 27, 2013 1:45:08 PM

Will it be overreaching for Treasury to issue "state of celebration" regulations to avoid "state of residence" rules? Yes. Will they do it? Probably.

And it will make federal taxation more predictable for same-sex couples who change their state of residence, or reside in different states. What is the filing status of a Massachusetts couple who move to Mississippi in December? The Ohio couple, married in New York, who move to California in December? The Nevada couple, with one spouse residing in California and the other in Nevada, because employment for each is available only in the state of residence? (That's an actual case that a colleague had to deal with earlier this year.)

The rules can be simple, or we can use the "dual-status alien" procedures now needed only for immigrants.

Posted by: Bob | Jun 27, 2013 10:45:45 AM

I'd like to see a discussion of the adverse tax implications for single taxpayers and those living in non-marriage relationships like two brothers or grandparent-grandchild, who will now be paying more to support a society with more folks crowding in to feed at the nanny-state udder.

Posted by: Jimbino | Jun 27, 2013 8:31:44 AM