Today the Treasury department announced that it will recognize all same-sex marriages valid in the “place of celebration” regardless of where the couple now lives. This is particularly noteworthy because it seems like a policy change. It had generally been thought that the IRS deals with other questions of marital validity by looking to residence. That’s what the Tax Court thought in Von Tersch v. Comm’r (1967) (“For the purpose of establishing eligibility to file a joint Federal income tax return, the marital status of the two individuals is to be determined under the laws of the State of their residence.”); that’s what Patricia Cain thought in DOMA and the Internal Revenue Code (2009) (pp. 513-514) (“Although the rule is not clearly and completely stated in the Internal Revenue Code, or in the regulations, it is generally assumed that for tax purposes, a couple will be considered as married if they are legally married in the state of domicile.”); and it’s what I assumed too.
The new Revenue Ruling argues, however, that the new rule is consistent with its past practice:
For over half a century, for Federal income tax purposes, the Service has recognized marriages based on the laws of the state in which they were entered into, without regard to subsequent changes in domicile, to achieve uniformity, stability, and efficiency in the application and administration of the Code.
I don’t know who is right here, although I assume that Treasury knows what it is talking about. (If there were an unacknowledged change, the ruling would be vulnerable.)
A few thoughts:
1. At this point, it seems pretty clear that the administration is trying to implement a place-of-celebration rule as broadly as it lawfully can, and that the Social Security decision a few weeks ago is likely to be an outlier. I’m in favor of a place-of-celebration rule as a policy matter. I think it would have been better for Congress to do it, but by now I’ve gotten used to the Obama Administration doing unilaterally things that I think Congress ought to have done.
2. Also importantly, the ruling is retroactive, although only in a tax-payer-favoring way. Taxpayers with a same-sex marriage may, but needn’t refile their past several years of returns to claim married status.
3. Finally, the ruling also declares that the federal definitions of “spouse,” “marriage,” etc. “do not include individuals (whether of the opposite sex or the same sex) who have entered into a registered domestic partnership, civil union, or other similar formal relationship recognized under state law,” but it does not provide any explanation why not. (Previously.)