Love & the Law: The IRS v. NY
Edie and Thea had been together for more than 44 years; they became one of the first registered domestic partners of New York; and as Thea\’s health began failing dramatically, the couple legally married each other in Toronto, Ontario, Canada. When Thea died a few years after their lifelong relationship and marriage, the federal government refused to recognize their marriage and taxed Edie\’s inheritance from Thea as though they were strangers. Under federal tax law, a spouse who dies can leave her assets, including the family home, to the other spouse without incurring estate taxes. Ordinarily, whether a couple is married for federal purposes depends on whether they are considered married in their state. New York recognized Edie and Thea\’s marriage, but because of the so-called the \”Defense of Marriage Act,\” or DOMA, the federal government refuses to treat married same-sex couples, like Edie and Thea, the same way as other married couples. After spending decades together, including many years during which Edie helped Thea through her long battle with multiple sclerosis, it was devastating to Edie that the federal government refused to recognize their marriage, their loving and solemnized dedication to each other. With representation by the American Civil Liberties Union, the New York Civil Liberties Union, and the law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP, Edie challenged the constitutionality of DOMA and seeking a refund of the estate tax she was unfairly forced to pay. Edie alleged that DOMA violates the Equal Protection principles of the U.S. Constitution because it recognizes existing marriages of heterosexual couples, but not of same-sex couples, despite the fact that New York State treats all marriages the same. On June 6, 2012, Judge Barbara Jones ruled for Edie and against the IRS, stating that Section 3 of DOMA as it applies to legally married same-sex couples for purposes of estate taxation is unconstitutional. Though this isn\’t a Supreme Court ruling and, therefore only persuasive outside of NY, it is a large and critical step in the undoing of DOMA. The Love & the Law Episodes: Brief Case History | Contraceptives | The Color of Love | The IRS v. NY | Privacy? No. Sex? No. History? No. Liberty? Yep. Pt 1 | Privacy? No. Sex? No. History? No. Liberty? Yep. Pt 2
DOMA Forces Same-Sex Couples to Commit Fraud
In June of this year, 2011, Illinois enacted the Civil Union Act, which provides that all the rights, benefits, and obligations of Illinois spouses are also attributed to Illinois Civil Union partners. A little more than a month later, on July 24, New York enacted the New York Marriage Equality Act, legally recognizing same-sex marriages. Other states continue this progressive and important march toward ending love discrimination while other states remain firmly entrenched in their discriminatory public policies against the LGBT community. Differences between states and discriminatory laws and policies will continue and remain in force until DOMA is repealed. So, it’s important that members of the LGBT community who are partnered in civil unions or are same-sex spouses, their loved ones, and professionals servicing them understand the implications of their status, based on DOMA. President Bill Clinton enacted DOMA (the “Defense of Marriage Act”) in the wee hours of one morning in 1996. The law stipulates that the U.S. federal government only recognizes marriage as between one man and one woman as husband and wife and “spouse” means a person of the opposite sex with respect to his or her husband or wife. Consequently, any spousal benefits derived through the federal government, and there are approximately 1,138 of them, are unavailable to civil union partners or same-sex spouses, despite state laws. Yes; Illinois provides that civil union partners are afforded all the rights, benefits, and obligations of spouses but despite that language the federal government, through DOMA, tells same-sex couples “not in my backyard.” Tax benefits are one backyard where same-sex couples experience discrimination because of DOMA. For example, the divorce settlement between heterosexual couples is tax-free. However, for same-sex couples, the payee ex-spouse or ex-partner must generally pay taxes on any divorce settlement received. More importantly, as an annual fiscal household matter, same-sex couples must file income tax forms that are fraudulent on one hand because the forms don’t reflect the true nature of the relationship, requiring individuals to state that they are “single,” when they are legally married or partnered. State income tax in Illinois is coupled with federal income tax, so even if a couple’s union is afforded the same “benefits” per Illinois law, that couple cannot take the marital tax benefit on either the state or the federal income tax form. Finally, if it’s not enough that same-sex couples are discriminated against in tax treatment with respect to income and divorce, same-sex couples also face the insult with respect to death. To illustrate: Debbie and Janet entered into a legal civil union on June 5, 2011. On July 12, Janet passed away, leaving an estate valued at one million dollars to Debbie. If Debbie were married to “John” and not a civil union partner of “Janet,” Debbie would take the estate tax free. However, Debbie was partnered with Janet and, thus, will have to pay approximately $350,000 in estate taxes. A case similar to these facts, Windsor v. United States, is why the current administration stopped defending DOMA. It is a discriminatory law promulgated by a country that is supposed to consider all people equal in the eyes of the law. How can a law that requires individuals to falsely claim who they are be constitutional?