Advising clients amid constitutional challenges to the Defense of Marriage Act.

• Author: Kinkaid, Amy I.

The Defense of Marriage Act (DOMA), P.L. 104-199, enacted on Sept. 21, 1996, is a federal law that defines marriage as the legal union of one man and one woman. Section 3 of DOMA results in the nonrecognition of same-sex marriage for all federal purposes including insurance benefits, Social Security benefits, the filing of joint tax returns, and the unlimited marital estate tax exemption available to opposite-sex married couples.

On May 31, 2012, the First Circuit declared Section 3 of DOMA unconstitutional, upholding a district court decision (Massachusetts v. United States Dep't of Health and Human Servs., 682 F.3d 1 (1st Cir. 2012)). The appeals court held that DOMA's denial of federal benefits to same-sex couples lawfully married in Massachusetts violates the Equal Protection Clause of the U.S. Constitution.

The appeals court found that DOMA does not prohibit states from allowing same-sex marriage. However, it found that DOMA does unconstitutionally limit the ability of same-sex couples to participate in federal benefits such as Social Security and favorable tax rates.

The court of appeals affirmed the district court's holding but continued the stay of relief, which included ordering the payment of federal tax refunds with interest, and set the stage for the Supreme Court to decide the issue in the coming months.

Another DOMA constitutional challenge involving the right of a same-sex surviving spouse to use the estate tax marital deduction (Windsor, 833 E Supp. 2d 394 (S.D.N.Y. 2012), aff'd, No. 12-2335-cv(L) (2d Cir. 10/18/12), S. Ct. Dkt. No. 12-63 (petition for cert. filed 7/16/12)) may also be headed to the Supreme Court. On June 6, the U.S. District Court for the Southern District of New York ruled that the IRS's denial of an unlimited marital deduction under Sec. 2056(a) to the surviving spouse in a same-sex marriage was unconstitutional. The judge ruled that Section 3 of DOMA unconstitutionally discriminates against same-sex couples, and the Second Circuit affirmed the decision on Oct. 18. On July 16, the attorneys for the Windsor case applied for certiorari and requested the justices consider the case as a more comprehensive challenge to DOMA.

These court decisions, as well as several other court cases challenging DOMA, open the door to an opportunity and responsibility for tax practitioners to assist their clients in same-sex marriages with protecting their rights to federal and state tax refunds as well as providing additional...