Theodore P. Seto (Loyola-L.A.) presents The Role of Marriage in the Internal Revenue Code at the symposium today on Legal, Secular, and Religious Perspectives on Marriage Equality/Marriage Protection/Same-Sex Marriage hosted by the St. John’s Journal of Civil Rights and Economic Development and the Ronald H. Brown Center for Civil Rights and Economic Development. Here is the abstract:

Although the definition of marriage and its consequences are both hotly contested legal issues, we lack a descriptive understanding of the role marriage actually plays in many areas of the law. This paper explores the descriptive question in one area: tax – specifically, the federal taxation of individuals. It suggests that almost all federal tax rules that turn on whether two people are married can be understood as solutions to one of two interrelated problems: “entanglement” and “relative indifference.” By “entanglement,” I refer to the fact that the daily activities of spouses are commonly so intertwined as to make standard rules for their taxation impossible to apply – even if we wanted to. By “relative indifference,” I refer to the fact that entangled spouses often do not care who owns what, owes what, earns what, or pays what to the degree they would if they were not interpersonally committed. As a result, they are often able to engage in tax avoidance behaviors that atomistically motivated actors would find unattractive.

If correct, my description of the role of marriage in the Code can do two types of work. First, it may assist in the analysis of tax provisions invoking marriage and allow us better to solve the problems to which such provisions are responsive. Second, if we believe it desirable to solve those problems generally, “marriage” should be defined for federal tax purposes to include all relationships that exhibit entanglement and relative indifference, insofar as special treatment of such relationships is administrable. In particular, if committed long-term same-sex relationships exhibit entanglement and relative indifference, we should treat such relationships as the equivalent of “marriage” for federal tax purposes and apply the same solutions in the same-sex context that we apply to traditional heterosexual marriages. Failure to do so will render same-sex couples taxable (at least in theory) on many of their household activities, render them subject (at least in theory) to onerous reporting obligations and penalties, result in the imposition of lower effective rates on conventional income than are imposed on similarly situated heterosexual couples, and create multiple opportunities for lawful tax avoidance by same-sex couples.