New York Times, From IRS to Gay Couples, Headaches and Expenses, by Scott James:
The IRS, not exactly known as a bastion of compassion, had these words for gay and lesbian couples this week: we’re sorry.
The public apology was in response to inquiries from The Bay Citizen about problems faced by same-sex couples, most in California, who are filing returns in compliance with new rules that recognized their relationships for the first time.
The change to the tax code, put into effect for 2010, was supposed to be a step toward equal treatment by the IRS. Instead, couples have faced a litany of conflicts. The latest involves at least 300 taxpayers who have had their returns rejected with terse letters signed by an enigmatic IRS employee named J. Bell from Fresno.
“Your return includes income or tax liability for more than one taxpayer, other than husband and wife,” the letters read. Note: husband and wife. Not two husbands, or two wives.
Couples who received the letters had to produce additional paperwork and faced delays in receiving refunds; most were forced to hire tax professionals.
In a statement this week, the IRS said that the letters had been “incorrectly sent” because of a processing error and that it “apologizes for this mistake and sincerely regrets any inconvenience to taxpayers.” …
How the errant letters started is unclear. Tax experts who brought the letters to the attention of the IRS weeks ago had wondered if anti-gay IRS employees were acting out of malice. …
J. Bell is just the latest headache for same-sex couples — 60,000 in California — trying to comply with a tax system that has become increasingly complicated because of inconsistencies between state and federal laws regarding their relationships.
The 1996 Defense of Marriage Act effectively bans federal recognition of gay couples, yet more than a third of states recognize some form of legal partnerships.
To deal with one of these conflicts, the IRS said last year that same-sex couples in states with community property laws (California, Nevada and Washington) should combine and then split their incomes for their federal returns. The motivation behind the change was fairness: heterosexual married couples can combine incomes, which can lower tax brackets and overall taxes paid if one spouse earns more.
But the change has had mixed results.
Interviews with more than a dozen Bay Area tax preparers and same-sex couples have revealed that the new rule has proved to be cumbersome and expensive. It is too complex for do-it-yourself tax filing computer software, and many couples were forced to hire tax professionals. …
The Bay Citizen, Should Gays be Taxed the Same as Straights?, by Scott James:
there’s a passionate fight happening largely outside of the spotlight over gays and taxes, and it has national implications for the entire gay rights movement.
Many of the leaders of this battle are right here in the Bay Area.
At the forefront is Patricia Cain, a law school professor at Santa Clara University and leading expert on same-sex tax law. She’s been studying (and advocating) on this issue since 1991 – her blog is required reading on the subject. In fact, Professor Cain is so far out front on this issue that while I’m writing about one problem she’s already working on the next snag gay couples will face (self employment tax snafus, FYI).
“Federal tax laws have failed to keep up with state property and family laws,” Dr. Cain said. And it’s not just gay couples that are impacted – millions of Americans live in alternative family situations these days not recognized by the IRS.
If Dr. Cain is the general in this fight, she has a battalion of accountants, lawyers and tax experts joining her in battle.
Among them is Mary Anne Courtney, an enrolled agent and certified financial planner in San Francisco who everyone refers to simply as “Courtney.” She worked with many of the couples I interviewed, and she’s dismayed the differences between the rhetoric from Washington and reality.
“I just heard the proclamation from the Obama White House saying June is LGBT month. That’s great. That’s my president. Now tell the IRS,” she said.
Lawyer Deb Kinney is also a distinct voice in this fight. Between personal appearances and online seminars, she estimated that she and her peers reached about 6,000 gay taxpayers and their accountants to instruct them about the recent IRS change. “We did as much as we could,” she said.
Why such a huge effort?
There’s more than just the current tax mess at stake.
Americans have a heightened sense of fair play. Not everyone agrees that same-sex marriage should be legal, but most people think that everyone should be treated equally when it comes to the IRS and taxes. Gay rights advocates believe that a majority of Americans will conclude it’s fundamentally unfair that gay people are taxed differently than straight people.
Opponents of same-sex marriage have seen this argument coming and are prepared.
Tom McClusky, senior vice president of the Family Research Council in Washington, D.C., a faith-based organization that has taken a high profile position against gay marriage, said the issue is not tax fairness, but that homosexuals want rights that others do not have.
“It’s not a matter of equality,” McClusky said. “They’re looking for special treatment.”
The Family Research Council opposes any tax changes that would treat same-sex couples the same as heterosexual married couples. The group argues that the union of one man and one woman benefits society and should be encouraged by the government, and “that homosexual conduct is harmful to the persons who engage in it and to society at large, and can never be affirmed,” according to the FRC website.
McClusky seemed almost gleeful when told about the mess same-sex couples have faced with the recent IRS change.
“They asked for special treatment, so they can’t complain about the complications they’ve received because they got what they wanted,” he said.
So it appears yet another front has opened up in the culture wars, one waged with accountants and spreadsheets.
Source: The Bay Citizen (http://s.tt/12DFl)
I learned that there’s a passionate fight happening largely outside of the spotlight over gays and taxes, and it has national implications for the entire gay rights movement.
Many of the leaders of this battle are right here in the Bay Area.
At the forefront is Patricia Cain, a law school professor at Santa Clara University and leading expert on same-sex tax law. She’s been studying (and advocating) on this issue since 1991 – her blog is required reading on the subject. In fact, Professor Cain is so far out front on this issue that while I’m writing about one problem she’s already working on the next snag gay couples will face (self employment tax snafus, FYI).
“Federal tax laws have failed to keep up with state property and family laws,” Dr. Cain said. And it’s not just gay couples that are impacted – millions of Americans live in alternative family situations these days not recognized by the IRS.
If Dr. Cain is the general in this fight, she has a battalion of accountants, lawyers and tax experts joining her in battle.
Among them is Mary Anne Courtney, an enrolled agent and certified financial planner in San Francisco who everyone refers to simply as “Courtney.” She worked with many of the couples I interviewed, and she’s dismayed the differences between the rhetoric from Washington and reality.
“I just heard the proclamation from the Obama White House saying June is LGBT month. That’s great. That’s my president. Now tell the IRS,” she said.
Lawyer Deb Kinney is also a distinct voice in this fight. Between personal appearances and online seminars, she estimated that she and her peers reached about 6,000 gay taxpayers and their accountants to instruct them about the recent IRS change. “We did as much as we could,” she said.
Why such a huge effort?
There’s more than just the current tax mess at stake.
Americans have a heightened sense of fair play. Not everyone agrees that same-sex marriage should be legal, but most people think that everyone should be treated equally when it comes to the IRS and taxes. Gay rights advocates believe that a majority of Americans will conclude it’s fundamentally unfair that gay people are taxed differently than straight people.
Opponents of same-sex marriage have seen this argument coming and are prepared.
Tom McClusky, senior vice president of the Family Research Council in Washington, D.C., a faith-based organization that has taken a high profile position against gay marriage, said the issue is not tax fairness, but that homosexuals want rights that others do not have.
“It’s not a matter of equality,” McClusky said. “They’re looking for special treatment.”
The Family Research Council opposes any tax changes that would treat same-sex couples the same as heterosexual married couples. The group argues that the union of one man and one woman benefits society and should be encouraged by the government, and “that homosexual conduct is harmful to the persons who engage in it and to society at large, and can never be affirmed,” according to the FRC website.
McClusky seemed almost gleeful when told about the mess same-sex couples have faced with the recent IRS change.
“They asked for special treatment, so they can’t complain about the complications they’ve received because they got what they wanted,” he said.
So it appears yet another front has opened up in the culture wars, one waged with accountants and spreadsheets.
Source: The Bay Citizen (http://s.tt/12DFl)
I learned that there’s a passionate fight happening largely outside of the spotlight over gays and taxes, and it has national implications for the entire gay rights movement. Many of the leaders of this battle are right here in the Bay Area.
At the forefront is Patricia Cain, a law school professor at Santa Clara University and leading expert on same-sex tax law. She’s been studying (and advocating) on this issue since 1991. … “Federal tax laws have failed to keep up with state property and family laws,” Dr. Cain said. And it’s not just gay couples that are impacted – millions of Americans live in alternative family situations these days not recognized by the IRS.
If Dr. Cain is the general in this fight, she has a battalion of accountants, lawyers and tax experts joining her in battle. … [I]t appears yet another front has opened up in the culture wars, one waged with accountants and spreadsheets.
Same Sex Tax Law Blog, My Birthday Present, by Pat Cain:
What would I like for my birthday? How about an apology from the IRS about how it has been treating same-sex couples in community property states this tax season? Voila! It came — just one day after my real birthday. Close enough. …
Just to be clear, in my view, the battle is not between us and the IRS. The IRS wants to do the right thing. It wants to tax each citizen on the right amount of income under existing law. That is its job. However, the IRS is seriously hampered from promulgating rules that apply to same-sex couples by the the Defense of Marriage Act (DOMA). The IRS is to be commended for understanding that DOMA cannot usurp state property law. Thus I continue to applaud its decision about how to tax community income of same-sex couples. And now that the IRS understands how difficult it is to communicate these new rules, even to its own employees, I applaud them again — this time for their apology — which, by the way, I accept.
