I think the Internal Revenue Service did a good job getting real guidance issued on the meaning of the United States Supreme Court’s finding that Section 3 of DOMA is unconstitutional. On August 29, 2013, the Internal Revenue Service issued Revenue Ruling 2013-17 (binding guidance) and some new FAQs (not binding, but often just restating the binding guidance).
Key points of the ruling:
The Internal Revenue Code and regulations should be read in a gender neutral manner. This is helpful because there are several references in both to “husband and wife” rather than always “spouse.”
For federal tax purposes, a state of celebration approach is used to determine if a couple is married. Thus, if they are married in any state, DC or foreign country allowed to confer marriage status, they are married, even if they live in a state that does not recognize the marriage.
Couples in a registered domestic partnership or civil union are not considered married for federal tax purposes.
The ruling is effective for returns filed after 9/15/13. Thus, same-sex married couples will definitely have to file either as married filing joint (MFJ) or separate (MFS) for 2013. Amended returns can be filed, if desired, for earlier years still open under the statute of limitations.
This ruling, as well as the FAQs and Notice 2013-61 on how employers can obtain FICA refunds for excess FICA paid on income that had to be reported for workers who had spousal benefits.
There are still several open issues and likely more will be found as people go forward, as well as work to amend prior year income, payroll, gift and estate returns and plans. I was pleased to have the opportunity to work with several other members of the AICPA to create a list of these issues. The AICPA sent the letter to the IRS on 10/30/13. Here are two of the several topics noted in the letter:
“The IRS should clarify if the taxpayer would also need to change the filing status if a same-sex married spouse needs to amend a prior return filed as single or head-of-household to make an adjustment unrelated to marital status. While this form is an amended return filed after September 15, 2013, it is not filed “in reliance on” Rev. Rul. 2013-17.”
“The IRS should clarify whether a same-sex married employee who requests that his/her employer file to obtain a FICA tax refund must also amend his/her Form 1040 to change the filing status.”
In accordance with Circular 230 Disclosure
Annette Nellen, CPA, Esq., is a professor in and director of San Jose State University’s graduate tax program (MST), teaching courses in tax research, accounting methods, property transactions, state taxation, employment tax, ethics, tax policy, tax reform, and high technology tax issues.
Annette is the immediate past chair of the AICPA Individual Taxation Technical Resource Panel and a current member of the Executive Committee of the Tax Section of the California Bar. Annette is a regular contributor to the AICPA Tax Insider and Corporate Taxation Insider e-newsletters. She is the author of BNA Portfolio #533, Amortization of Intangibles.
Annette has testified before the House Ways & Means Committee, Senate Finance Committee, California Assembly Revenue & Taxation Committee, and tax reform commissions and committees on various aspects of federal and state tax reform.
Prior to joining SJSU, Annette was with Ernst & Young and the IRS.
1 comment on “Many Tax Questions On Same-Sex Federal Tax Filings”
Good information here and we still have so many unclarified issues. The biggest problem I’m finding with local tax practices headed by CPAs is keeping their tax preparation staff aware of unusual matters affected by marriage. Most CPAs I know refreshed their knowledge with targeted CE courses and many sent their tax preparers to EA exam training. For example, a higher level of tax expertise is commonly called for when addressing businesses owned by jointly filing taxpayers. Now, same-sex couples are entitled to use the status of qualified joint venture on federal tax returns.
Comments are closed.