North Carolina same-sex couple wasn't entitled to joint filing status
In a ruling issued July 13, 2009, the U.S. Tax Court held that a same sex couple was not entitled to joint filing status.
Facts. According to the Tax Court, Charles E. Merrill is a well-known gay rights activist, artist and millionaire. He is the cousin of the founder of Merrill Lynch and was married, for 23 years, to the late Evangeline Johnson Merrill, an heiress to the Johnson & Johnson Company. Merrill began a relationship with Kevin Boyle shortly after Merrill's wife passed away. He and Mr. Boyle have been together for more than 18 years. They lived in North Carolina during the years at issue. They participated in a commitment ceremony in 2004, but North Carolina did not recognize same-sex marriages. They were legally married in 2008 after moving to California.
After Merrill failed to file a tax return for 2004 or 2005, IRS contacted him. He responded with a letter stating that he was not evading taxes, but refused to pay taxes as an act of civil disobedience advocating same-sex marriage equality. IRS prepared substitutes for returns for the years at issue and issued deficiency notices to Merrill. In the substitutes for returns, IRS determined Merrill's filing status to be single. Merrill was assessed tax totaling about $835,000.
Merrill argued that he must be accorded married filing joint status, rather than single status, because of his long-term domestic partnership with Mr. Boyle. IRS argued that Merrill is not entitled to this status because he was not married in the years at issue and he did not file a joint return for those years. He did not otherwise contest the tax. Given Merrill's income level, joint return status would not have made a big difference in his actual liability.
Joint filing status denied. The Tax Court noted that Merrill was not married during the years at issue. It also noted that he did not file a return for the years at issue and, therefore, is not entitled to married filing joint status.
The Tax Court observed that, whether a taxpayer is married for Federal income tax purposes is determined by reference to the laws of the State of his marital domicile.
Merrill admitted he was not legally married for either of the years at issue but argued, nonetheless, that he should be allowed to file joint returns because he was in a long-term committed relationship with his gay partner and North Carolina did not recognize same-sex marriage.
The Tax Court said that a taxpayer must file a joint return with his or her spouse and it must be signed by both spouses to claim the married filing joint status.
The Tax Court pointed out that it has previously held that where a taxpayer did not file a return and a substitute for return was prepared using single filing status, the taxpayer may claim married filing joint status only by subsequently filing a return. Here, Merrill never filed a return for 2004 and 2005. Accordingly, the Tax Court held he is not eligible for married filing joint status with respect to these years.
While the Tax Court did not affirmatively say so, a same sex couple that is legally married in any of the states that now allow same sex couples to marry may not file jointly for Federal income tax purposes anyway. That's because "The Defense of Marriage Act" ( P.L. 104-199, Sec. 3 ) defines marriage for purposes of administering Federal law (such as the tax code) as the "legal union between one man and one woman as husband and wife." It further defines "spouse" as "a person of the opposite sex who is a husband or wife."
About the Writer
Desmond G. Sheridan is a partner in the Greensboro law firm of Isaacson Isaacson Sheridan & Fountain, LLP and is a certified public accountant. His practice areas are business transactions, tax, corporations, limited liability companies, commercial real estate and estate planning. Sheridan has served on the Board of Directors of the North Carolina Association of Certified Public Accountants and has been recognized as a North Carolina "Super Lawyer" and a member of the "Legal Elite" by Business North Carolina. He has given numerous continuing education presentations to CPAs and attorneys.
