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Poor IRS Must Now Tackle Benefits For Gay Couples

From the Politico:

Next on IRS to-do list: Benefits for same-sex couples

By KELSEY SNELL | June 26, 2013

The IRS — already stretched thin managing scandals, a complicated tax code and the implementation of the health care law — has a new task: providing federal tax benefits to gay couples.

And don’t forget their task of making sure conservative organizations don’t get tax exempt status.

At its heart, the case to overturn the Defense of Marriage Act centered on tax policy. Edith Windsor, the plaintiff in the case, was slapped with a $363,000 tax bill after the death of her wife. She wouldn’t have faced the tax if the federal government had recognized her marriage, which took place in Canada. The couple lived in New York, a state that recognized Windsor’s union when her wife died in 2009.

Notice that no one has ever suggested that the estate tax should be done away with. That would be too simple.

By the way, the estate tax still discriminates. Since married couples (whether in same sex or different sex marriage) don’t have to pay the tax, but unmarried couples do. For instance, if two spinster sisters live together for sixty years, and one of them dies, the survivor has to pay the estate tax.

Unless they get married. Which, if they are smart, they will start to do.

But Wednesday’s ruling, heralded as a landmark decision by gay and lesbian activists, creates a host of challenges for the IRS and will likely fuel uncertainty about how tax benefits will be applied…

For starters, the agency will essentially have to create two tax regimes.

One system, for couples in states where same-sex marriage is recognized, will allow gays and lesbians to file their tax returns jointly, exclude them from paying taxes on their spouse’s estate and clear them to contribute together to health savings and flexible spending accounts. The other system, for couples in states that don’t recognize same-sex marriage, wouldn’t allow such benefits.

A couple who marries in a state or country where same-sex unions are legal but lives in a state where such marriages aren’t recognized wouldn’t receive federal tax benefits.

And a couple who moved from a state like Maryland, where same-sex marriage is legal, to a state such as Virginia, where the constitution bans recognition of such unions, would see their tax benefits curbed or eliminated entirely.

The rulings also create a logistical nightmare for the seven states that recognize civil unions or other legal partnerships that are not already defined as marriage. Couples in states like Illinois will still have access to the state benefits of their legal partnership, but the court has not made clear if their partnerships are legal in the eyes of the federal government…

In reality this article is just another subtle way of pointing out that gays should really push for every state to pass same sex marriage. It’s going to cost them money if they don’t. (In fact, we can expect to see a lot of these kind of articles from the MSM in the coming months)

But if that doesn’t work, you can be sure the IRS will just throw up their hands and say every gay couple will get the estate tax break, no matter where they live. Even though it will cost the government money. After all, the government can’t afford to offend gays.

Something tells us that the IRS is going to say this is too complicated to enforce, and that everyone will get the benefit whether they are in a state that recognized gay marriage or not.

This article was posted by Steve Gilbert on Thursday, June 27th, 2013. Comments are currently closed.

3 Responses to “Poor IRS Must Now Tackle Benefits For Gay Couples”

  1. I can’t imagine God laughing up his sleeve over any of this.

    That said, the surest way to end the Gay Marriage kerfuffle is to allow them to marry. If Statistics has any value.

  2. Petronius

    The Federal estate tax also discriminates against heterosexual married couples where one of the spouses is a foreign national, even though that spouse is a US legal permanent resident.

    In such international marriages the spousal exemption does not apply.

    The Court’s decision thereby grants more rights to gay couples than to straight couples.




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