or can be, based on one’s adjusted gross income—and this could negatively impact benefits. On benefit matters, I recommend contacting the issuing organization to see how they will deal with these community property tax returns under the revised ruling. One big tax advantage is that same-sex and RDP couples are not subject to the “Married Filing Separate” limitations that opposite-sex couples are. No doubt other financial and benefit impacts will become evident, as this ruling is totally dissected.


In short, fasten your seat belts! It’s going to be a bumpy ride as the full impact of the


ruling is sorted out. On the positive side, the sorting process will help to underscore the unconstitutionality of DOMA and likely lead to its repeal. In the meantime, review IRS publication number 555, seek advice from your tax accountant in regard to your personal circumstances and keep your eye on the pot of gold at the end of the rain- bow—civil equality under the laws of the land! IRS publication number 555 can be found at: irs.gov/publications/p555/index.html


This 2010 IRS ruling was listed on the federal Taxpayer Advocates Service’s list of “most serious problems”. Same-sex marriages and Registered Domestic Partnerships are now recognized in


IA, CT, MA, NH, NY, DC and VT, but the IRS does not follow state law for the recogni- tion of same-sex marriages. For federal purposes, DOMA defines marriage as “a legal union between one man and one woman as husband and wife, and the word ‘spouse’ refers only to a person of the opposite sex who is a husband or a wife.” Gay and lesbian married couples still cannot file a federal tax return using the “Married-Filing-Jointly” or “Married-Filing-Separately” statuses, although nine states do permit gay couples to file jointly. Accordingly, same-sex couples that are legally married, in a civil union or in a RDP, must use a different filing status on the federal and state tax returns. Due to this added complexity, it is advised that you consult an experienced tax professional for advice on filing federal and state tax returns. This is an evolving issue and laws can change quickly, so check with your state’s tax authority for the rules.


NOTE: The day after this interview, I attended a tax seminar for RDP and same-sex married couples in San Diego. John Chiang, California State Controller was the keynote speaker and was joined by tax attorney Larry A. Conway, one representative each from the California Franchise Tax Board and Board of Equalization and a professor of law— after the seminar, I spoke with the tax attorney to confirm my assessment:


• The impact of the IRS ruling on RDP and same-sex married couples in community property states is complicated by what specifically constitutes community property. Currently, this ruling requires RDPs, or same-sex married couples in these states to pre- pare their single federal tax returns based on their state’s community property rules. In each case, both must report their share of community property income, but each type of income can be split differently, depending on previously arranged agreements like nuptials and when income was earned, residency and other factors.


• There are many significant federal and state tax disadvantages and advantages cre- ated by this IRS ruling and DOMA: tax liabilities, divorce costs, filing costs and time, inheritance, property re-valuations, etc.


• Putting same-sex married and RDPs on an equal tax footing with opposite-sex mar- ried couples is a tangled web that cannot be fairly dealt with until DOMA is repealed.


IT GETS PERSONAL! On September 15, Social Security Administration served notice to me of my


responsibility to reimburse it for the majority of benefits paid me in 2010. The mid-2010 IRS ruling, mentioned above is retroactive to January 1, 2010. It made me liable for half of my husband’s sole proprietor business income listed on Schedule C of his tax forms, while simultaneously preventing us (due to DOMA) from filling married single status—an option open to federally recognized marriages. As a result, I am denied the $5,700 standard deduction, increasing our tax burden substantially. If this ruling stands, I will not be able to collect benefits until my 66th birthday. Effectively reversing the early retirement benefits previously guaranteed and granted under existing laws and practices. To add insult to injury, our net tax bill will be greater, and my husband will have earnings cut in half for the last years of his earning, thus lowering considerably the social security benefits he would have been entitled to under previous laws and allowable practices of which we had been planning our future upon. We have 30 days to appeal, and of course, will do so emphatically. To garner awareness and support, I would like to hear from other same-sex


couples who are unexpectedly and negatively impacted by the IRS ruling, for a possible presentation to the ACLU for assistance with a class action law suit, in the hopes of finally killing DOMA. This suit would also prevent the military, despite the repeal of DADT, from withholding benefits and services from LGBT members and their families. “Just think about it!” Write to me, Bill Kelly, at bkelly@ragemonthly.com with


your thoughts and stories and share them with your state and federal repre- sentatives!


Mr. Conway also provided the following statement: “Same sex relationships didn’t


just begin with the advent of registration or marriage. Many couples have been to- gether for decades, acquiring property before they were recognized as spouses under state law. While the IRS did the right thing in recognizing community property rights post-registration, the complexity of dividing community vs. separate income under such circumstances places an undue burden on a community already suffering from unequal treatment, which can only be rectified by allowing such couples to file joint returns as any other married couple are allowed.


For additional articles and resources go to: ragemonthly.com


“In the meantime, review IRS publication number 555, seek advice from your tax accoun- tant in regard to your personal circumstances and keep your eye on the pot of gold at the end of the rainbow—civil equality under the laws of the land!


OCTOBER 2011 | RAGE monthly 35 ”


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