Lawmakers to IRS: Clear up tax issues for same-sex couples

A group of roughly 75 House members, almost exclusively Democrats, is pushing the IRS to clean up issues that same-sex married couples and domestic partners face in filing their taxes.

Overall, 15 states recognize either same-sex marriages or domestic partnerships, with New York becoming the sixth state to allow same-sex couples to marry this summer.

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But the Defense of Marriage Act, passed by Congress in the 1990s, means the federal government does not recognize same-sex marriages, leading to filing confusion that the group of lawmakers wants the IRS to address.

“Now, more than ever, our tax system must be simplified for taxpayers and provide for efficient and economical administration of our tax laws,” the lawmakers, spearheaded by Rep. Jim McDermott (D-Wash.), wrote to Doug Shulman, the IRS commissioner.

“While we believe that legislative action should be taken to fully address the inequities experienced by same-sex couples, we urge the IRS to take immediate action within its authority to reduce unnecessary burdens and ensure our tax law is applied fairly and equitably to all taxpayers,” they added.

As the letter notes, Nina Olson, the nation’s taxpayer advocate, cited some of the issues same-sex couples face in her 2010 annual report to Congress. Olson, among other things, notes that same-sex spouses can face stumble over claiming credits related to having children, and in dealing with education and health tax credits.

The lawmakers’ letter notes another issue faced by couples in California, Nevada and Washington. In those states, the IRS requires that community income and deductions be split 50-50 between a couple. But inadequate IRS tracking, the letter says, leads to domestic partners being wrongly penalized.

“DOMA and various state laws regarding domestic partnerships and same-gender marriages give rise to a large number of unintended or unforeseen federal tax law ambiguities, making it possible for hundreds of thousands of taxpayers to take inconsistent positions in good faith,” Olson wrote in her report, calling on the IRS to give taxpayers more guidance in this area.

An IRS spokeswoman did not respond to a request for comment on the lawmakers’ letter. But in its response to Olson’s report, the agency said that, because of widely different and still evolving state laws, it did not believe that it would be able to compile nationwide guidelines for same-sex couples.

“In the absence of legislation resolving these issues, the IRS and the office of chief counsel intend to continue, where appropriate, to respond to taxpayer requests for advice tailored to their particular state’s law,” the agency wrote.