Supreme Court hears two days of oral arguments on the constitutionality of DOMA in an estate tax case

The United States Supreme Court, in the estate tax case of Windsor v. U.S., is considering the constitutionality of the Defense of Marriage Act (DOMA).  It is a highly anticipated case and is considered such a landmark important case that the Court heard two days of oral argument. The case concerns a surviving same-sex spouse who is seeking an estate tax refund.  An estate tax was paid because assets were left to a same sex spouse and the Internal Revenue Code under DOMA requires that no marital deduction is available for the estate. Although DOMA is not generally a tax law, it carries tax consequences for same-sex couples by requiring that they be treated as unmarried for Federal law purposes. The Court's decision may potentially have a major impact on the administration of the IRC.

By way of background, in 1996, Congress enacted, and President Clinton signed DOMA which in Section 3 defines marriage as the “legal union between one man and one woman as husband and wife.”

 

The district court and the Second Circuit Court of Appeals both found in favor of the Taxpayer and ruled the provision of DOMA requiring a man and a woman for a marriage to be unconstitutional. 

 

While waiting to see if the Supreme Court follows the lower Courts, it is generally recommended that same-sex couples in domestic partnerships or civil unions or marriages file protective claims for refund in the event that DOMA is invalidated.  The impact of the decision may affect income tax as well so stay tuned for the result of what could be a monumental decision.