- Category: Individual Taxes
- Written by Madeline Delanni
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OK, here's a sticky one. If you are a gay couple that is legally married in a US state or another country that performs such marriages, can you file your federal income tax return as married even if the federal government refuses to acknowledge your marriage?
Answer: Since the Defense of Marriage Act (DOMA) defines marriage for federal tax purposes as excluding same-sex couples, only opposite-sex couples can file as married.
Note: Gay & Lesbians Advocates & Defenders (GLAD) has filed a suit in the federal district court of Massachusetts. They claim DOMA is unconstitutional, and their lawsuit includes plaintiffs who want to file their tax returns as married rather than single. For information about this lawsuit, go to www.glad.org.
Tax advisers have warned same-sex married couples not to file as married (either jointly or separately) because of the possible imposition of penalties for doing so. However, many face confusion with the federal return requirement of individuals to swear under penalties of perjury that all statements in the return are true. If a person objects to signing this statement on a return in which they have been forced by the federal government to lie about their marital status, they may consider putting an asterisk by the "single" box and at the bottom of the form indicate that they are only single under DOMA. Another option is to include an attachment to your return, similar to the following:
Sample Attachment to Federal Tax Return Affirming Marriage
Name of taxpayer:Social Security #:
"The above named taxpayer married a person of his/her same sex in [place] in [year]. The taxpayer has not filed this return as "married" (either jointly or separately) solely because the Defense of Marriage Act (DOMA) defines marriage as a legal union between a man and a woman. By filing as "single," the taxpayer is in no way disavowing his/her marriage."
Some tax advisers have suggested that you might be able to file a joint return if you not only had a sincere belief that DOMA was unconstitutional, but also had a reasonable legal opinion to that effect. Section 6664(c) of the Internal Revenue Code provides that “no penalty shall be imposed [for the underpayment of tax] if … there was a reasonable cause for [the underpayment] and the taxpayer acted in good faith….” Most legal practioners, however, are unwilling to provide their clients with a legal opinion that DOMA is unconstitutional because such an opinion is likely to subject them to preparer penalties under Section 6694. To avoid penalties, the opinion would have to be based on “substantial authority” and at the present time all courts that have considered the constitutionality of DOMA have upheld it. That could change in the future with the test case that is being pursued by GLAD.
Some commentators have suggested that in addition to meeting the reasonable and good faith requirements of Section 6664(c), you must also file Form 8275-R or Form 8275, disclosing your position, with your Form 1040. However, these forms are intended to be used when a taxpayer is taking a position contrary to a revenue ruling or a Treasury regulation, and not when the taxpayer is ignoring a statute, such as DOMA. It is unclear how a taxpayer objecting to a statute would fill out these forms, but if your intent is to disclose your position, the preferred means of disclosure is to use official IRS forms.
Penalties have been applied to other taxpayers who made constitutional claims about marital status. Some years ago a married couple, who honestly believed that the marriage tax penalty that resulted from combining their two earned incomes on a joint return was unconstitutional, elected to file their returns on the basis of single taxpayer rates. They claimed the marriage tax penalty was an unconstitutional burden on their marriage. The Court of Appeals for the Second Circuit decided otherwise and also upheld the imposition of a penalty on the couple. The lesson from this case is that you probably cannot avoid paying penalties, even if you disclose, when the law that you are ignoring is a statute, rather than a mere rule or regulation. See Druker v. Commissioner, 697 F.2d 46 (2d Cir. 1982).
The penalty for an underpayment for disregard of a rule is calculated based on a percentage of the underpayment. The amount of the penalty is an additional 20% of the underpaid tax. It isn’t clear who this penalty would be assessed against in the case of two taxpayers who filed jointly rather than as two single people. For example, if A, filing as single, would have owed $3,000 in tax and B, filing as single would have owed $31,000, but filing jointly, together they owe only $33,000, then the underpayment that results from disregard of the statute is $1,000. Presumably the $1,000 penalty would be levied only against B, the higher of the two earners.
How can you affirm your marital status, object to DOMA, file a joint return, and not be subject to penalties? Here are two possibilities:
1. File two single returns (including the attachment affirming the marriage) and then file an amended return, filing jointly. The amended return is a 1040X. This is what the plaintiffs in the GLAD case did. Once the IRS rejects the amended return, or if six months passes and they do nothing, the taxpayers who file an amended return have the right to file suit in federal district court claiming the refund. The basis of the claim for refund by a Florida same-sex couple would be that they were married, that under the U.S. Constitution that marriage should be recognized, that it would be perjury to claim otherwise, and that DOMA itself is unconstitutional. This option would avoid penalties because your original return would be filed according to the statute.
2. Submit two returns to the IRS, one filed jointly, showing the tax due on a joint return, and one filed as a single taxpayer, showing the tax due on a single return. Explain your constitutional and moral theory entitling you to file a joint return. Pay whatever amount is due on the single return and ask the IRS to choose which return to accept. If you have paid the amount due on the basis of a single return, then you have not made an underpayment as a result of disregarding a statute. Penalties are only due if there is an underpayment. If the IRS accepts your single return and accepts your tax payment on that basis, there is no penalty. Of course if the IRS accepts your joint return and that results in a refund to you, there is no way to know what will happen if you are later audited. That would be a new case.
In many cases, of course, you will actually pay a higher tax if you file jointly. In that case, you should not owe a penalty.