The National Center for Lesbian Rights has a new client, Jennifer Tobits. Jennifer’s case is tragic, symbolic, and legally significant. It’s tragic in its human dimensions–a grieving widow is forced to contend with her late partner’s homophobic and heartless family and their efforts to erase her legal marriage. It’s symbolic in its demonstration of why same-sex couples need legal protections and how DOMA is still being used to challenge our legal relationships–and in a way, of how the more things change, the more they stay the same. (Remember Sharon Kowalski and Karen Thompson, anyone? That was more than 20 years ago.) And it’s legally significant in that it requires a court to decide whether DOMA applies to a private company as well as whether the couple’s Canadian marriage will be recognized in Illinois. Read this great post by Professor Nan Hunter about the legal details, and this blog by Kate Kendell providing some context for the case.
Category Archives: Federal LGBT Policy
First, bankruptcy. In a surprising move on Monday, June 13, 19 of the 24 judges in the Central District of California bankruptcy court Los Angeles signed on to a decision holding that the federal Defense of Marriage Act is unconstitutional. The opinion allows Gene Balas and Carlos Morales, who were legally married in California in 2008 , to file jointly for Chapter 13 bankruptcy protection to deal with their joint creditors after dealing with a prolonged period of unemployment and illness. This decision is significant because it gives added power to two existing decisions out of the Massachusetts federal court (Gill v. Office of Personnel Management and Commonwealth of Massachusetts v. U.S. Department of Public Health), and because of the number of judges that signed on. The case is only binding in the this court’s jurisdiction, but it will have impact well beyond that. For more about the bankruptcy aspects, see Nolo’s Bankruptcy Blog.
Next, taxes. If it’s surprising to find a passel of bankruptcy judges going to bat for a gay couple, it’s even more shocking to find the Internal Revenue Service apologizing to them. But that’s exactly what happened in California, where approximately 300 same-sex couple taxpayers who filed joint tax returns listing their status as married received letters from the IRS rejecting their returns because the return included “income or tax liability for more than one taxpayer, other than husband and wife.” Under California law, same-sex couples who are married or registered domestic partners must file as married, so these letters were entirely inappropriate, as the IRS acknowledged in its followup letters saying the original notices were sent in error. As Professor Pat Cain notes in her blog post on this subject, the problem isn’t really the IRS. It’s the Defense of Marriage Act. Yes, that one that the bankruptcy judges declared unconstitutional (see above), a belief shared by President Obama and his Justice Department. And me.
Last, benefits. Another unfair aspect of DOMA is unequal taxation of employee benefits. Thousands of gay and lesbian employees provide domestic partner or spousal health insurance coverage to a partner through their jobs. Many have done so for years, and each year, those employees have paid taxes on the value of those benefits, because the Internal Revenue Service, as an agency of the federal government, does not recognize same-sex marriages or marriage-equivalent relationships like domestic partnership or civil unions. Employers also take a hit in the form of additional payroll taxes—or face problems if they don’t know about the discriminatory rule. Guess what? None of this happens when opposite-sex spouses are in the same situation. Now, a bipartisan bill recently introduced in Congress would end that practice and treat health care benefits the same for same-sex and opposite-sex married couples. The bill appears to be in part a result of pressure from businesses, which find the differential treatment inconsistent with their desire to attract the best employees by providing competitive benefits. Let’s hope it makes its way through the legislative process quickly and that this discriminatory practice ends soon.
Filing tax returns is not that much fun for anyone, except maybe General Electric. But for same-sex couples, tax time is fraught with complications unique to relationships that are recognized by the state but not by the IRS–except sometimes. Confused yet? You should be.
In general, the IRS doesn’t recognize same-sex marriages or marriage-equivalent domestic partnerships or civil unions for tax purposes. Same-sex spouses and registered partners must file their federal tax returns as single, even if they are allowed (or required) to file as married or partnered in the state in which they live. This results in many couples preparing dummy federal returns in order to have accurate information to put on their state returns–in other words, it results in them paying an expert tax preparer to run the numbers for a state return and a federal return that aren’t coordinated.
For married or registered same-sex couples living in the three community property states that recognize same-sex relationships–California, Nevada, and Washington–things just got even more complicated with the IRS’s decision that these folks must follow their states’ community property rules relating to income on their federal tax returns, while still filing the federal return as single, separate taxpayers.
This means that the couple must add up their combined incomes, divide the resulting amount in half, and each report half of the income on their federal returns. For many people this is good news, as the income averaging will mean that a higher earner might fall into a lower tax bracket. Experts say that most couples will benefit or break even, though couples who both earn close to the same amount won’t benefit and will pay more for tax preparation. However, couples who do benefit get an extra break–they can go back and amend their returns as far back as 2007 using the community property numbers. For some, this will create quite a windfall.
Most same-sex couples in community property states will need professional tax help–even self-help software Turbo-Tax recommends seeking personalized advice rather than using its tax program.
Just two days ago, I blogged about an announcement from the U.S. Citizenship and Immigration Services (USCIS) that it would put on hold decisions about cases involving same-sex binational couples–a seeming big step away from the discriminatory policies based on the Defense of Marriage Act (DOMA) that have previously dominated the agency’s decision-making. Here’s an informative Daily Beast story about the hold.
It didn’t exactly seem too good to be true–that status would be reserved for an actual repeal of DOMA. However, the hold was apparently too good for something, and it has already been lifted. USCIS announced on March 30, 2011, through press secretary Christopher S. Bentley, that, “The guidance we were awaiting … was received last night, so the hold is over,” and “we’re back to adjudicating cases as we always have.” Bentley went on to say that USCIS would continue to “enforce the law,” in other words refuse to recognize same-sex marriages for purposes of approving green card applications.
Is this the last word on the subject? Not necessarily. With the Justice Department’s new position that DOMA is unconstitutional, plans by members of Congress to seek repeal of DOMA, and various cases challenging DOMA winding their way through the U.S. court system, it’s likely that the Supreme Court will rule on DOMA’s constitutionality within the next few years–which will of course affect green card applications for married same-sex partners.
Responding to President Obama’s recent statement regarding the Defense of Marriage Act (DOMA), the United States Customs and Immigration Service (USCIS) has asked its field offices to stop proceedings in any cases involving foreign partners married to same-sex spouses. In other words, the USCIS will hold off on denying green cards in same-sex marriage cases, while awaiting further word on the status of DOMA.