Congress Asks IRS to Simplify Tax Rules for Same-Sex Couples, Domestic Partners

A bipartisan group of 75 lawmakers has written to IRS Commissioner Doug Shulman asking him to fix inequities in the Tax Code that place married same-sex couples and registered domestic partners at a disadvantage.

The letter was sent by Rep. Jim McDermott, D-Wash., but was co-signed by 74 other members of Congress, including members of the tax-writing House Ways and Means Committee. It explains the difficulties faced by same-sex couples and domestic partners when filing even simple tax returns and urges the IRS to address the extra burdens faced by these taxpayers who live in community property states.

“Currently, 15 states recognize same-sex marriage or domestic partnerships,” said McDermott and the other lawmakers. “The absence of federal recognition for these couples has created ambiguity and complexity in the tax law that can, in part, be mitigated through IRS action…Now, more than ever, our tax system must be simplified for taxpayers and provide for the efficient and economical administration of our tax law.”

They noted that domestic partners living in the states of Washington, California and Nevada face additional tax complexity with respect to community property. For couples living in those states, community income and community deductions need to be shared equally between both partners, as required by the IRS and Supreme Court precedent. However, the current IRS systems do not adequately link domestic partners, resulting in erroneous notices of improper reporting and the inaccurate assessment of penalties and interest. “These errors are costly for the taxpayer to address, and waste significant IRS funds and resources,” the lawmakers noted.