What if I\’m Neither: Opposite Does Not Equal Different
Welcome to the second article in our series on \”Estate Planning for the T&Q of the LGBTQ Community.\” Click here to read the first article. The role of pronouns and how important that role is to transgender and queer persons is illustrated by the language in marriage equality case law and our statutes, especially when combined with certain adjectives. Consider Illinois’ first “marriage equality statute,” the Illinois Religious Freedom Protection and Civil Union Act (“Civil Union Act”). Section 5 of the Civil Union Act provides that one of its fundamental purposes is to “provide persons entering into a civil union with the obligations, responsibilities, protections, and benefits afforded or recognized by the law of Illinois to spouses.” Section 5 contains no language involving gender or biological markers. However, when reviewing Section 10, Definitions, we see that “‘Civil Union’ means a legal relationship between 2 persons of either the same or opposite sex…” So, according to the Illinois Civil Union Act, persons who entered into civil unions had to be either male or female. What if one or both of the parties was neither? Section 5 requires the Civil Union Act to be liberally interpreted. Arguably, the liberal interpretation is to be applied to the parties and actions satisfying the definitions of Section 10. So anyone living in some of Illinois’ more conservative counties who didn’t satisfy the definitions is SOL, right? Setting aside the question the Civil Union Act left open for transgender and queer couples, the conundrum still emerges when considering the language in U.S. v. Windsor. The last paragraph in Windsor states, “DOMA instructs all federal officials, and indeed all persons with whom same-sex couples interact, including their own children, that their marriage is less worthy than the marriages of others.” Windsor patently applies to same-sex couples; it is not gender neutral. Therefore, while Windsor was a watershed moment for same-sex couples desiring or intending to marry, it left in the wings, however, transgender and queer couples. Now, you could say that this is being too technical or that this interpretation of Windsor is too narrow; but au contraire. The grant or denial of benefits or rights in this country often hinges on a single word or definition. Even in friendly states, if a person identifies as neither – because they are in the process of sexual reconstruction or because they simply do not identify as male or female – that person may experience legal difficulties because they are asked to check a box that does not comply with their identity. If this issue causes problems in friendly states, imagine the results in unfriendly states. Returning to Illinois statutory law, we see that the language in Illinois’ new marriage equality statute embraces the entire LGBTQ community. Carefully considering our Marriage Fairness Act’s Section 5 language, we see that the Act’s underlying purpose is to “provide same-sex and different-sex couples and their children equal access to the status, benefits, protections, rights, and responsibilities of civil marriage.” Note that the term “different-sex” replaces the term “opposite-sex” that was in the Civil Union Act. This was not an oversight. Thus, the Illinois Marriage Fairness Act embraces transgender and queer couples, in addition to lesbian and gay couples. Perhaps our state\’s legislators should make a trip to the U.S. Supreme Court. Estate Planning for the T&Q of the LGBTQ Community: Part 1 | Part 2 | Part 3 | Part 4
Protecting You and Yours Even if You\’re Neither…
Recognizing and hoping that this series may be moot in 6 months, when SCOTUS hears cases from Ohio, Michigan, Kentucky, and Tennessee that involve state bans on same-sex marriages, in the interim, planning for those who may be \”neither\” is important. The following are remarks from a presentation I gave in the fall of 2014 at the Illinois Institute for Continuing Legal Education: What if I\’m Neither: Estate Planning for Transgender and Queer Persons. In striking down Section 3 of the so-called Defense of Marriage Act (“DOMA”), SCOTUS’s U.S. v. Windsor ruling delivered a great victory to the LGBTQ community and especially to the L, G, and B persons and couples. However, the rights afforded this and other marriage equality victories were still questionable for certain couples, specifically those whose parties included transgender or queer persons. So estate planning for the entire LGBTQ community still required a thorough understanding of the laws, rules, regulations, and opinions involving both marriage and gender equality. A big issue for lawyers is understanding “who” our clients are. If this is important to us, it’s crucial for our clients because if the lawyer doesn’t get it; then you clients should find a lawyer who does. Identifying who is the client, can be reduced to a simplistic answer is we use Illinois law. Section 10(c) of The Illinois Religious Freedom and Marriage Fairness Act (“Illinois Marriage Fairness Act” or “Marriage Fairness Act”) provides: Parties to a marriage shall be included in any definition or use of terms such as “spouse,” “family,” “immediate family,” “dependent,” “next of kin,” “wife,” “husband,” “bride,” “groom,” “wedlock,” and other terms that refer to or denote the spouse relationship, as those terms are used throughout the law, regardless of whether the parties to a marriage are of the same sexes or different sexes. As you can see, this section of the Marriage Fairness Act completely removes gender orientation as a factor in determining marital relationships and the accompanying rights, burdens, benefits, and obligations for Illinois citizens. If gender is removed from the marital relationship formula, then what’s left? Who are the parties? Who are the clients? Simple: Persons. The individual who is sitting at the conference room table seeking our help is a person. The individual may be a transgender person or queer, but he, she, Dana, or they is (and, in this case, the grammar is correct) a person first, deserving of the respect, dignity, and excellent service provided any client. In other words, if a lawyer doesn’t recognize a potential client as a person, then that person shouldn’t recognize that lawyer as competent to serve the potential client’s needs. Estate Planning for the T&Q of the LGBTQ Community: Part 1 | Part 2 | Part 3 | Part 4
Will Marriage Equality Be Recognized Nationally?
The marriage equality march is returning the U.S. Supreme Court again this April and this time, the Court may just determine to end the continued discrimination against same-gender couples in the 14 states that refuse to allow loving, committed couples of the same gender to marry. The plaintiffs who caused the straw on the camel\’s back to break are a lesbian couple from Michigan whose case created yet another division between the 36 who get it and the 14 who don\’t. If you\’re familiar with our marriage equality work, you know we\’ve been watching and participating in the marriage equality march from our firm\’s inception. So, we are pleased that some sources report that Chief Justice Roberts may side with the plaintiffs in this case. Note, C. J. Roberts did not decide on the constitutionality of state bans in Windsor, and left himself room to join or, even pen, the appropriate decision in this case. Why? Because of Loving v. Virginia, which we and other colleagues have long argued is the fundamental legal basis for providing national marriage equality. Other legal analysts also wonder if the Court will revisit the term \”animus\” because the seminal cases involving recognizing individual rights for the LGBTQ community involve a determination of animus on the part of opponents to LGBTQ rights. The Court has allowed extra time for arguments. The decision is likely to be reached at the end of June. We are confident where the socially conservative 3 justices – Thomas, Scalia, and Alito – will stand. We are also confident where the socially liberal justices – Ginsberg, Breyer, and Kagan – will stand. Many also think that Kennedy will side with the liberal 3 but we\’re not so sure given his recent decisions on individual rights involving minorities. Additionally, Sotomayor was the intervenor for Kansas, providing opponents of marriage equality to at least temporarily prevail in upholding Kansas\’s marriage equality ban. Thus, we\’ve got a number of interesting scenarios confronting the question: Roberts votes with Ginsberg, Breyer, and Kagan and Kennedy, who sided with them in Windsor, will create a plurality allowing for marriage equality in America and thus, creating the United States of America once again, at least with this issue; Roberts votes with the liberal 3 but Kennedy and Sotomayor do not, leaving the patchwork and discrimination in place; Roberts votes with the conservative 3 but Kennedy and Sotomayor side with the liberal 3 (see plurality cited in #1); Roberts sides with the conservatives and Kennedy or Sotomayor also side with the conservatives (see patchwork and discrimination in #2). June will be a very interesting month indeed – for the LGBTQ community, for America, and for the Roberts Court legacy.
Love & the Law: A Polar Vortex Campfire Tale
Updated May 27, 2023 Amidst Polar Vortex 1 of January 2014, a group of wonderful folks and yours truly sat around a warm office, invited by IntraSpectrum , discussing LGBTQ relationship rights. I introduced them to my series Love & the Law, here, as briefly as I could and we had a great time. So, really, what does all of this mean? Well, my (former) rockstar intern, Emily Welter, boiled down my hefty remarks into a few poignant and fabulous images and take-aways: The equality fight then The equality fight later… and… DOMA … and … WINDSOR and … SCOTUS… and POTUS… OH MY! Much like Dorothy and her gang, our Nation’s lawmakers followed a harrowing yellow brick road to marriage equality for over 50 years. We have come a long way from the 1966 case of Loving v. Virginia and we made positive strides towards that “Emerald City” of equal love. Below are 8 key points to know about the legal changes that took place in 2013 – aka the “Watershed Year” – which have affected Estate Planning for today’s LGBT couples: Several States passed marriage equality laws; SCOTUS (\”Supreme Court of the United States\”) ruled in favor of lesbian surviving spouse, Edith Windsor; SCOTUS ordered the IRS to treat legally married same-sex couples the same as straight married couples; The IRS mandated equal treatment of legally married LGBTQ couples for all tax treatment; The IRS called employers to issue FICA refunds to legally married LGBTQ couples; The IRS called on other agencies to comply with the new IRS rules; USCIS removed its barrier to legally married LGBTQ immigrant spouses; AND, finally Illinois passed same sex marriage(!); SCOTUS ruled in favor of marriage equality in Obergefell v. Hodges; and President Joe Biden signed the Respect for Marriage Act, repealing DOMA and helping ensure marriage equality for all U.S. persons.
Our Readers\’ Top 5 Articles from 2013
Like most, The Shark Free Zone took a little time off to reflect over last year’s work and our readers’ preferences. So before the “reflection” month of January is over, below are the top 5 articles from 2013. Enjoy! NUMBER ONE. The popularity of our top article for 2013 may have had a little to do with its melodramatic title, “Infants, Stairwells, & Burning a Million Dollars.” The premise was less dramatic than the title, but still important: If professionals or smallbiz owners fail to protect their assets by not planning, they might as well set their income and belongings on fire. Of course, we’re not advocating arson, but if someone slips and falls on your property or a toddler visiting with Mom finds his or her way into a non-child-proof cabinet, oh woe… Click here to read the star of The Shark Free Zone for 2013 and feel free to pay it forward. TWO. \”What the Civil Union Means…to Many,\” was a spillover all the way back from 2011, providing useful information on LGBTQ couples considering or entering into Illinois Civil Unions. It\’s continued popularity was likely because it resonated with many concerned about the economic benefits that can be reaped when discrimination ends. It’s a somewhat moot now that Illinois has passed the Religious Freedom and Marriage Fairness Act, providing marriage equality to Illinois LGBTQ couples. However, the article has many relevant points, so you can read it here. Our article on marriage equality in Illinois is forthcoming, so stay tuned! THREE. Smack dab in the middle is our series, whose information, is rising to the top of the news charts as more statistics and reports are being shared daily about the large aging Baby Boomer population. We first mentioned the Baby Boomer issue, or “Silver Tsunami,” a few years ago. It is now abundantly clear to all advisors that almost everyone is or will be affected by the Boomer generation, especially families that are unprepared. Don’t get caught by the Boomer wave. Prepare for the Silver Tsunami by checking out this middle entree. FOUR. Fourth in last year’s popular articles again involved marriage equality, particularly DOMA’s undoing. Our series, “The IRS Takes a Bite Out of DOMA” highlighted the complex estate and financial planning machinations LGBTQ couples had to take before the U.S. Supreme Court’s ruling in U.S. v. Windsor and the subsequent IRS ruling 2013-17 that removed a lot of that complexity for legally married LGBTQ couples, and especially those in \”friendly\” states. Tap here to read the beginning of this important 4-part series. FIVE. Rounding out our top 5 is “The Money Talk.” Recently, a relative became engaged, which will likely happen with many couples next month on Valentine’s Day. As couples take this loving step, it’s critical to know and understand each other’s mindset as it relates to saving, spending, investing, charitable giving, and a host of other related issues. So before you say “yes” or consider putting a ring on it, consider having this conversation. So there you have it: The top interests of 2013 were about love, money, and justice. What else is there to be interested in, except a pair of good looking shoes, right?
The IRS Takes a Bite Out of DOMA, Pt 4
Last week’s article was the third in this series covering the court cases and government rulings that have been issued over the last several months. Today’s article, the last in the series, will consider migrating same-sex couples, i.e., couples who move from a state with one set of marriage equality laws to a state with a different set of marriage equality laws. With respect to marriage, all couples fall into 3 basic mindsets: lawfully married, intending to marry, or not reached the fence yet. For the sake of this article, we’ll also put states in 3 basic categories: friendly, unfriendly, and grey, such as Wisconsin. Lawfully married couples who migrate to an unfriendly state, will likely have state income and estate tax issues, presuming the state has an estate tax. If they have or plan to have children, a problem may emerge involving parental recognition and rights. Also, legal problems involving healthcare may arise, such as decision-making authority and visitation rights in medical emergencies. Lawfully married couples residing in friendly states should think long and hard before moving to unfriendly or grey jurisdictions. Married same-sex couples in a grey state should consider the worst-case scenario and take lessons from living somewhere like Alabama. One would think that the easiest advice to give married couples in a friendly state would be, “STAY PUT.” However, tax minimization and relationship recognition aren’t always the most important factors LGBT families face. Still, if all else is equal, they should STAY PUT. If a couple is engaged or intends to wed, they should consider all of the factors. Moving by itself is often a relationship destroyer, regardless of gender makeup. Add to that the stress of relationship recognition issues and stir in income tax burdens for good measure, and the couple may be divorced even before getting married. So great thought should be given to moving, especially if moving soon before or after the wedding. If a couple has yet to seriously consider marriage, they should travel together. If they begin considering marriage, they should move to a friendly state. A friendly hypothetical always helps to illustrate a point: Facts: Chris and Chaz marry in Iowa in 2010, move to Indiana, have a baby girl, Sarah, and Chris is killed in Indiana in 2012. Now Chaz’s attorney must file an estate tax return. Chris was also a transgender. Points to ponder: Was their marriage was valid? Iowa legalized same-sex marriage in 2009; they were married in 2010, so their marriage was lawful. The estate administration lawyer filed estate and income tax returns within 9 months of Chris’s death; can the income tax return be amended now? Yes; the return is inside the statute of limitations. Should the return be amended to reflect the marriage? Good question. It depends on potential advantages and disadvantages. Can the estate tax return, which was filed on June 21, 2012 be amended and should it be? Yes and it depends on a number of factors. Another hypo: If Indiana’s wrongful death statute required payment only to the spouse or children, does Chaz have standing to even claim? No, unless Chaz is willing to renounce their same-sex marriage which would be demeaning and a circumstance no one should have to endure. Also a final wrinkle is the fact that because Chris was the biological parent, Chaz would likely have to apply for guardianship before being able to act on behalf of baby Sarah as an heir. Though Windsor, Perry, and the government\’s guidance substantially increased marriage equality for LGBT couples, the decisions and rulings also resulted in more patches and landmines for migrating LGBT couples to navigate. Biting DOMA was good, but chewing the entire statute up would have been much more satisfying for those who want and deserve complete marriage equality. The IRS Bites DOMA Pt 1 | 2 | 3 | 4
The IRS Takes a Bite Out of DOMA, Pt 3
Before beginning today’s article in earnest, a brief recognition and review of the legislative process is relevant. Yesterday, Tuesday, November 5, 2013, was a historic day for Illinois. The state’s legislature voted affirmatively on the question of marriage equality, i.e., allowing Illinois same-sex couples to marry. Thus, Illinois LGBT couples, as of June 1, 2014, may enter into a legal state of loving matrimony. Listening to members on the floor of the House deliver the reasons why they favored the bill, SB10, one theme rang loud and clear: We should not be a society where the law treats individuals or groups in our population differently because other individuals or groups disagree with their lifestyles, don’t like them, or may not understand what makes them “different.” Sidebar: I’m saving arguments that address the reductio ad absurdum issue for later. Being one of those “different” kinda folks myself, I have always been a proponent of marriage equality and LGBT equal rights. Yet, when I saw and heard Catholics and African American men steadfastly and eloquently place their support behind the law, a sense of pride in our legislature, in our democratic system of governance, in our state, washed over me. While Illinois, most assuredly, has its fiscal woes, our money problems aren’t, or at least shouldn’t be, the ultimate issue. The ultimate issue is whether those of us with immutable differences, such as sexual orientation and identification, skin color, or ethnicity, should be afforded the same rights as those whose immutable characteristics are more commonplace. Surely, if we look deep enough, we will recognize that, in some way, we are all different, and our differences should not be the sole basis for refusing, abrogating, eliminating, or enlarging our rights individually and collectively. The fundamental rights of all should be equal. Therefore, if a state gives the right to marry or literally speaking, license to marry, to one group, it is an abomination to our system of democracy if we do not provide the same license to another. So it stands that Illinois citizens should applaud our legislators who lifted the rights of all Illinoisans yesterday when they provided marriage equality to our LGBT community. Now back to the business at hand, which is even more poignant for Illinois couples given the last 24 hours. Because of Windsor and the flurry of guidance that followed, disparate treatment of lawfully married same-sex couples under federal tax laws has been virtually eliminated. Therefore, estate and tax planning for same-sex married couples is more aligned with traditional estate planning methods for opposite-sex married couples. In the post Illinois Civil Union – make that the Illinois Religious Freedom and Marriage Fairness – Act and post Windsor plus guidance world, a same-sex married couple in Illinois should receive equal federal and Illinois treatment for purposes of income tax, estate tax, qualified retirement plans under ERISA, and FICA. However, practitioners must be mindful of the nuances between Illinois and federal law, such as, statute of limitations for amending returns, date of marriage recognition, portability*, and the fact that Illinois estate tax exemption is lower than the federal exemption. *Portability is the “check the box rule” that allows a surviving spouse to use the unused portion of the deceased spouse’s lifetime gift exemption. EXAMPLE: Michael dies on June 30, 2014 and used $1M of his $5.34M federal exemption. David, Michael’s surviving spouse can add the remaining $4.34M of Michael’s exemption. This means if David hasn’t used his, he now has $9.68M to give away tax free during his lifetime. NOTE: Before the Rev. Rule 2013-17, this wasn’t available to lawfully married same-sex couples anywhere in the U.S. So what does this mean for filing purposes? Because lawfully married same-sex couples are now equal in the eyes of the state and federal tax regimes for Illinois, they don’t have to complete “dummy” federal returns for income or estate tax purposes. WARNING: Illinois couples who are currently only in Civil Unions are not in federally recognized relationship; so, they must still complete the “dummy” forms. IRS Notice 2013-61 followed Rev. Rule 2013-17 and is at the center of the tax return amending issue for most married same-sex couples. The Notice requires employers to amend their 941 returns with respect to over withholding, FICA overpayment, and benefits counted as wages. Why is this relevant to estate tax returns? To file an accurate estate tax return, Form 706, an accountant or attorney should have an accurate income tax return record. Therefore, for these purposes especially, before amending a 706, a decedent spouse’s 1040 should probably be amended to account for Notice 2013-61 issues. Debates wage among colleagues about whether to file an amended return for an estate that is not taxable and, given the level of the federal exemption for a married couple, only very few estates are taxable at the federal level and even at Illinois’ level. Yet, if the income tax return is being amended, then filing a 706 might be advisable for consistency’s sake. Also, a surviving spouse should file a 706 if he or she wants to or should elect portability. All of this ultimately suggests that surviving spouses of same-sex marriages should request a filing extension on original returns to ensure that all tax records are thoroughly reviewed before filing amendments. The same premises apply for Illinois estate taxes because federal numbers drive state numbers. Of course, just because tax returns that fall within the statute of limitations should be reviewed, doesn’t mean they should be amended. Like a surviving spouse of an opposite sex marriage, a surviving spouse of a same-sex marriage might have to pay more taxes. Nevertheless, couples should review the amendment issue. As discussed last week, Rev Rule 2013-17 stipulates that “affected taxpayers may rely on this revenue ruling for the purpose of filing original returns, amended returns, adjusted returns or claims for credit or refund for any overpayment of tax resulting from these holdings providing the applicable limitations period for filing such claim
Illinois Legislature Passed Marriage Equality Bill
Illinois shall become the 15th state to recognize same-sex marriage. When Governor Patrick Quinn signs the bill, LGBT couples may become lawfully married on June 1, 2014. See the live vote and Illinois Representative Greg Harris\’ remark, here.
The IRS Takes a Bite Out of DOMA, Pt 2
As mentioned in the first article of this series, the U.S. Supreme Court’s (aka SCOTUS) Windsor decision resulted in a flurry of guidance from several government agencies. The agency leading the charge, because its treatment of estate taxes was called to the carpet in Windsor, was the IRS. Sidebar: When SCOTUS or an agency, such as the IRS, decides on an overall course of action, the action typically can’t or, better yet – shouldn’t, occur until the agency provides a legal how-to analysis and procedural guidelines (aka “guidance”) for those who depend on the agency when performing their respective jobs. In this case, it would be estate planners, CPAs, and others. The IRS responded to Windsor faster than most of us have ever seen with respect to an issue of discriminatory treatment of individuals; it’s response was Revenue Ruling (Rev. Rule) 2013-17. WARNING: Despite my best efforts the following language will likely be a little dry. Rev. Rule 2013-17 painstakingly crafted an IRS rule based on (1) gender neutrality, (2) the IRS’s historical treatment of common law marriage, and (3) the burdens placed on both the taxpayer and the IRS by the so-called Defense of Marriage Act (DOMA). Though somewhat spliced between most sections of the analysis, the rule provides that in the eyes of the IRS, “husband,” “wife,” and “spouse” each mean a “married person” and that “marriage” is a lawful union between “married people.” Thus, the Rev. Rule completely removed gender from the analysis of tax treatment for married couples. The IRS reached this conclusion by examining the references to gender within the Internal Revenue Code (Code) itself and found few instances of express, gender-specific terms. Further examination of legislative history and recognition of statutory construction (how laws should be interpreted) supported the gender neutrality basis for the federal tax treatment of married same-sex couples. Next, to answer whether credence should be given to state law if the state didn’t recognize the marriage as valid (recall, SCOTUS didn’t invalidate DOMA Section 2 which allows a state to not recognize valid same-sex marriages), the IRS considered its historical treatment of common law marriages. More than 50 years ago, the IRS decided that it would recognize common law marriages even if a state didn’t; therefore, it saw no reason to undo more than 50 years of precedent. (I will resist the strong temptation to comment on Citizens United here.) Equally important, the IRS determined that despite the lack of uniformity among the states regarding marriage and state taxes, “uniform nationwide rules are essential for efficient and fair tax administration.” Considering how inefficient DOMA Section 3 made tax administration, the IRS stated that “more than 200 Code provisions and Treasury regulations” contain terms pertaining to marriage. Additionally, more than 1,000 statutes and regulations are affected by DOMA, placing a huge burden on same-sex couples by forcing them to use a complicated tax return filing process. Finally, the IRS also recognized the increased healthcare costs to these families created by a loss of the tax benefits opposite-sex spouses enjoy though employer benefits. Also, looking at DOMA and its Section 3’s affect on tax administration, the IRS pointed to Windsor, where the reason for Section 3 was noted as anything but fair but, on the contrary, designed to “injure and disparage” same-sex couples seeking to marry. The Rev. Rule also acknowledged and agreed with SCOTUS\’s Fifth Amendment analysis inWindsor, stating that the IRS would prefer to pass rules and regulations that are more constitutionally valid than not. Accordingly, the IRS per Rev Rule 2013-17 affords legally married same-sex couples the same tax treatment with respect to the federal tax regime as married opposite-sex couples, even if the couple resides in a state that doesn’t recognize their marriage (an “unfriendly” state). The rule, however, also expressly provides that this treatment does not extend to those couples in a Civil Union, Registered Domestic Partnership, or other relationship that bears a substantial similarity in state law benefits to marriage but are not, in fact, marriages. IRS v. DOMA: IRS score BIG ONE; DOMA down 1 ½ . Tune in next week for what this means practically speaking for married LGBT couples. The IRS Bites DOMA, Pt 1 | 2 | 3 | 4
The IRS Recognizes Your Marriage Even if Your State Won\’t
Last week, in the wake of Windsor v. U.S., the IRS issued Revenue Ruling 2013-17. A Revenue Ruling, or “Rev. Rule,” is similar to a court opinion; it\’s just IRS law instead of case law. Thus, Rev. Rule 2013-17 mandated equal tax treatment for all lawfully married same-sex couples in ALL of the United States of America. As discussed here previously, in Windsor, the Supreme Court struck down Section 3 of the so-called Defense of Marriage Act (DOMA), which provided that the definition of marriage for purposes of rules, regulations, and laws promulgated through the federal government was the legal union of one man and one woman as husband and wife. The Windsor decision was a great step forward in ending discrimination against a segment of the U.S. population; however the decision was incomplete because it left standing DOMA\’s Section 2 that provides that states do not have to recognize same-sex marriages. As a result, Windsor v. U.S. left an even messier patchwork of laws for states and the federal government to wrestle with in regards to marriage equality. The question in Windsor was whether the IRS wrongfully denied issuing an estate tax refund requested by the surviving spouse of a married same-sex couple. The IRS lost in the lower court and SCOTUS affirmed that court\’s decision by striking Section 3. Having not prevailed, the IRS then had to determine how to comply with the Court Order. Had the IRS decided that tax return filings were to be based on domicile, then it would have been aligned with Section 2 of DOMA. Same-sex married couples residing in “unfriendly” states would have had to ignore the fact that they were legally married and file as “single.” So the IRS could still have chosen a less than friendly route for same-sex marrieds. However, recognizing the spirit of Windsor, Rev. Rule 2013-17 mandated equal treatment of married same-sex couples by basing the filing of returns on place of solemnization: \”For Federal tax purposes, the [IRS] adopts a general rule recognizing a marriage of same-sex individuals that was validly entered into in a state whose laws authorize the marriage of two individuals o the same sex even if the married couple is domiciled in a state that does not recognize the validity of that same-sex marriage.\” (Emphasis added.) What exactly does this mean overall? It means that lawfully married same-sex couples can live in unfriendly states and file taxes for the federal government using “married filing jointly” or “married filing separately.” Unfortunately, they still must abide by state tax return rules but at least they don’t have to move. What does this mean for same-sex couples in Illinois? If you were legally married elsewhere, e.g., Iowa, but reside in Illinois, you can file federal and state taxes using your legal relationship status and file “married filing jointly” or “married filing separately.” If you are in a Civil Union, you can\’t file your federal taxes as a married couple but you can file your state taxes as a married couple. Agreed: Illinois needs to get with the program and provide marriage equality. Summarily? While SCOTUS purportedly left the issue of validating same-sex marriage to the states, at least some federal agencies, such as the IRS, that actually must perform the work SCOTUS decisions create, recognize the \”United\” in U.S.A. and are willing to pass laws accordingly.