The AICPA recently submitted a 5 page letter to the IRS Chief Compliance Officer, requesting clarification and additional guidance for same sex couples attempting to navigate the SCOTUS DOMA ruling.
Among the many issues raised are questions about Registered Domestic Partners and Civil Unions. Some states, such as Oregon, have statutes which state that this status is the full equivalent of marriage. While Oregon is not specifically mentioned in the AICPA’s letter, several examples of possible confusion are given: Vermont permits both same sex marriages and civil unions. Are these both marriages for IRS purposes? And, Connecticut automatically considers prior civil unions as marriages. Does this mean that such couples are married in IRS’ eyes?
Another interesting wrinkle for Oregon couples is the fact that there are currently same sex couples who were actually married in Oregon during the brief time that Multnomah County issues such marriage licenses – back in 2004. Does that mean that these couples have actually been married all along under IRS’ interpretation of the DOMA ruling?
There are a total of 17 income tax and estate tax issues raised by the AICPA, which points to the complexity of the issues involved and the confusion that both same sex couples and their advisors are experiencing. Among these issues are when, whether and how each member of a couple should file amended returns. If one amends, is the other required to? And, if IRS audits one member of the couple does that mean they will then require a change to their filing status?
Another interesting issue is whether same sex couples can file Form 706, United States Estate Tax Return, late to claim portability, and if so, can they go beyond the normal statute of limitations? And, what about gift tax returns filed by same sex couples who are now considered married? Can prior filed Forms 709 be amended, and how far back can you go?
These are great questions raised by the AICPA, and I only hope that IRS can address them in a timely way, which may be difficult given their recent budget cuts and the extra work load they have related to the Affordable Care Act and other new tax legislation.