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Tax Season and Protective Claims 

3/18/2013

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Some married lesbian and gay couples are considering filing protective claims this year because of the pending U.S. Supreme Court cases in Windsor v. United States and Hollingsworth v. Perry.

These couples are filing amended federal tax returns listing themselves as "married and filing jointly". The Internal Revenue Code allows protective claims and the returns will be put on hold pending the outcome of, in this case, the Supreme Court's decision in those two cases.

The Defense of Marriage Act (DOMA) prohibits the feds from recognizing same-sex marriages. This means lesbian and gay married couples cannot file as married on their tax returns. They must file as "single". However, since they are legally married there is a concern about the "under penalty of perjury" provision when they sign their returns. It's a conundrum for them--they aren't single, except where the feds are concerned because of DOMA.

This is where the protective claims come into play. Look at IRS Pub 556 for additional information on how to file and talk to your tax preparer. There is a 3-year look back period for filing an amended return. You'll be able to go back to tax year 2009.

Protective claims are often based on pending court cases, like Windsor. It may be worthwhile to checkin into whether you are eligible to file a protective claim and whether it will do you any good. In some cases, a married lesbian/gay couple may be entitled to a refund.

No guarantees but it should be a consideration.
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Update on LGBT issues

3/18/2013

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Lots happening on the LGBT front. The U.S. Supreme Court will hear oral arguments on March 26 and March 27 in the Windsor v. United States and the Hollingsworth v. Perry cases.

Windsor deals with Edith Windsor's claim that section 3 of the Defense of Marriage Act (DOMA) is unconstitutional. She won at trial and in the 2nd Circuit Court of Appeals. Edith and her late spouse, Thea Spyer, were married in Canada (see my earlier post).

After Thea died Edith owed over $320,000 in federal estate tax. Had their marriage been recognized by the federal government the amount owed would have been $0--just like any other married couple. DOMA prohibits the federal government from recognizing same-sex marriages--even when the marriages are recognized in the taxpayer's state of residence.

So, the Supreme Court will consider the appeal. No one is sure what will happen or what the vote will be, but the next few months will be an interesting and tense time.

One big issue is whether the court will declare section 3 of DOMA unconstitutional across the board and require the feds to recognize same-sex marriages in every state; even those that prohibit recognition. And, what impact it will have on couples living in Civil Union and Domestic Partnership states.

The Hollingsworth case comes out of California and deals with Proposition 8, the 2008 California ballot initiative that prohibited same-sex marriage. The 9th Circuit decision was written with Justice Kennedy in mind and is narrowly drawn.

One issue that may preclude any definitive decision is if the court decides neither the Prop 8 proponents appealing in Hollingsworth or the U.S. Housing of Representatives appealing in Windsor have the right to appeal. The Court could dismiss both appeals without addressing the merits. It would be tantamount to a judicial kicking the can down the road. Stay tuned.
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Back in the saddle...

3/18/2013

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It's been awhile since I last posted anything. The past 8 months have been complicated. I have been caring for my parents--both 88--and, until last August, both in good health. Something had to give and I'm afraid it was this website and regular updates. My Dad died February 27 and Mom is dealing with the loss of the man she spent the past 66 years with. It continues to be a difficult time.

Lots happening on t
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    Author

    Joan M. Burda is a lawyer with a solo practice in Lakewood, Ohio. She limits her practice to estate planning. She writes on a variety of topics and is an adjunct professor at Case Western Reserve School of Law. Joan is nationally recognized for her work in addressing legal issues affecting the LGBTQ+ community.

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Joan M. Burda Attorney at Law • lgbtlaw@mac.com • 216.832.8825
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