Last week, a U.S. District Court in Massachusetts held that the federal Defense of Marriage Act is unconstitutional in preventing same-sex couples from filing joint tax returns and receiving various government benefits such as Social Security, saying it infringes on a states right to define marriage.
In 2009, Gay & Lesbian Advocates & Defenders filed a lawsuit against the Obama administration's Office of Personnel Management on behalf of eight married couples and three widowers from Massachusetts who were denied federal spousal rights and benefits because of DOMA. The 2006 federal law defines marriage as between a man and woman and refers to the word spouse as a member of the opposite sex who is a husband or wife.
U.S. District Judge Joseph Tauro ruled last Thursday that Massachusetts has the authority to recognize same-sex marriages and give same-sex couples the same rights, benefits and privileges as heterosexual couples. The 1996 federal law intrudes on a core area of state sovereignty, Tauro ruled.
Sullivan & Worcester LLPs Richard Jones and David Nagle served as tax counsel on the case. I talked with them about the tax implications.
There were a handful of plaintiffs in this case, said Jones. Some of them have different types of federal benefits that do not obtain as a result of DOMA because they were in a same-sex marriage. They were married under Massachusetts law, but under DOMA for federal tax purposes they were required to file as single individuals and not permitted to file joint returns.
Nagle said that plaintiffs in other states that recognize same-sex marriage might also benefit from the decision, especially if their taxes would be lower on a joint return, as was the case with the plaintiffs. Each of them would have owed less in federal taxes for filing the joint returns, which is why they had a claim, he said.
The plaintiffs filed amended returns in which they openly stated that they were challenging the constitutionality of the Defense of Marriage Act, added Jones.
Nagle pointed out the decision could also affect other types of taxes besides income taxes. The arguments likely apply to estate and gift taxes, he said. Regardless of how this case cuts, there is planning to be done. There always has been planning [needed] for same-sex couples because some of the same rules do not apply to them.
Both attorneys anticipate the federal government will appeal Judge Tauros ruling. Tauro also ruled last Thursday against the constitutionality of DOMA in a separate case, saying it violates the Constitutions equal protection clause, and that ruling may be appealed as well.
