Wed in Iowa, still married in Utah. The IRS yesterday announced that same-sex couples married legally in any state will be treated as married for tax purposes, even if they reside in a state that does not recognize same-sex marriages.
The IRS also announced that couples that married in earlier years may amend their tax returns to claim joint filing status for open married tax years. However, they will not be required to. Couples who extended their 2009 returns have until October 15, 2013 to file amended 2009 returns. Otherwise, 2010 is the earliest possible open year.
The announcement cuts both ways. If the IRS says you are married, you no longer have the option of filing as a single taxpayer. Many couples find that marital bliss comes at a tax price. This chart from the Tax Foundation illustrates income situations where marriage can be more costly than single status:
The opportunity for same-sex couples to choose between single and joint status for open years is unique. This only goes one way, though; joint filers cannot amend their open years to file as single taxpayers.
Couples who have legal status short of marriage, such as “registered domestic partners” recognized in some states, are not considered married by the IRS.
Other IRS releases on the issue:
Lot’s of coverage of this in the tax blog world. Iowa’s own Jason Dinesen has long owned this issue, and he comes through with BREAKING: IRS Releases Guidance on Same-Sex Marriage , The IRS’s DOMA Guidance: How are Iowa Returns Affected?, What if One Spouse in a Same-Sex Marriage Hasn’t Filed Yet? and Will Same-Sex Married Couples Be Required to Amend?
The Tax Policy Blog has also flooded the zone:
Trish McIntire, The IRS and DOMA – part 1
Peter Reilly, IRS Recognizes All Marriages But Not Civil Unions
Tax Trials, IRS Recognizes Same-Sex Marriages in All States
The Iowa angle: IRS will recognize marriage of same-sex Iowa couples (Des Moines Register)
There is a little other news today:
43 percent is the new 47 percent. And Now for the Movie: Fewer Americans Pay No Federal Income Tax (Roberton Williams, TaxVox):
The percentage of Americans who pay no federal income tax is falling, thanks to an improving economy and the expiration of temporary Great Recession-era tax cuts. In 2009, the Tax Policy Center estimated that 47 percent of households paid no federal income tax. This year, just 43 percent will avoid the tax.
Tony Nitti, Tax Aspects Of The NFL Settlement Payments “Well, if you’re a retired NFL football player, the Blue Book value has been set: your cognitive capacity is worth a cool $150,000.”
Andrew Lundeen, Why Eliminating Taxes on Capital Would Be Good for Workers (Tax Policy Blog)
Jack Townsend, Another Israeli Bank Depositor Plea to Conspiracy
Robert D. Flach tops off a heroic week with a third Buzz!
Perhaps this isn’t the best way to handle an IRS exam. Tax Analysts reports ($link) on a taxpayer who alleged that an IRS agent coerced him into sex:
Burroughs had sex with Abrahamson in September 2011 when she arrived at his home “provocatively attired,” according to the suit. U.S. Magistrate Judge Thomas Coffin concluded in the July 31 decision that Abrahamson was not acting in her official capacity, because the encounter occurred at Burroughs’s home during nonwork hours and “not in respect to the performance of official duties of the federal employee.”
One survivor of an IRS exam told me that she felt the least the IRS owed her for the experience was drinks and dinner.
Tags: TaxProf, Kay Bell, Robert D Flach, Linda Beale, Althouse, same-sex marriage, TaxGrrrl, Going Concern, Trish McIntire, Jack Townsend, Peter Reilly, Roberton Williams, Anthony Nitti, Tax Trials, Andrew Lundeen, Nick Kasprak, Elizabeth Malm