Supreme Court Strikes Down DOMA


In a 5 to 4 decision, the United States Supreme Court has found that Section 3 of the federal Defense of Marriage Act (DOMA) violates the equal protection clause of the Fifth Amendment of the U.S. Constitution as applied to persons of the same sex who are legally married under the laws of their state (Windsor, S.Ct., June 26, 2013, 2013-2 ustc ¶50,400). The majority, written by Justice Anthony Kennedy, held that DOMA is unconstitutional as a deprivation of the liberty of the person protected by the Fifth Amendment of the Constitution. Our Bergen County CPA office offers you insight to this.

The decision opens the door for same-sex married couples to enjoy many federal tax-related benefits previously available only to opposite-sex married couples. These include income tax benefits, estate and gift tax benefits, taxpayer-friendly employee benefits, and more. Same-sex couples must now also deal with circumstances under the tax law that may create a so-called “marriage penalty.” Employers must prepare for extensive changes in the treatment of same-sex couples. And individuals claiming tax credits and other provisions under the Patient Protection and Affordable Care Act are impacted by the decision.

The Supreme Court did not extend same-sex marriage nationwide; it declined to say whether same-sex couples had a Constitutional right to marriage that would override state law. But the Supreme Court’s decision has opened up federal benefits -including those under the Internal Revenue Code— to same-sex couples considered married under state law. The Windsor decision leaves many additional issues unresolved or unclear. Among them are the status of “domestic partnerships” and “civil unions” under state law in connection with federal benefits, the status of a same-sex couple married in one state but now residing in a state in which same-sex marriage is not recognized, and the ability of married same-sex couples to divorce without first moving back to a state that recognizes same-sex marriage.

Immediately after the Windsor decision was released, questions arose regarding the impact of residency upon the recognition of marital status for federal tax purposes. Will same-sex couples duly married in one state who now reside in a state that does not recognize same-sex marriage be entitled to federal benefits, including being able to file jointly under the federal tax laws? …Or will they be required to file as single under federal law as well as state law? While President Obama on June 27 expressed the view that same-sex marriages performed in one state should apply to another, he added that “I’m speaking as a president and not as a lawyer.”

In December 2012, the Supreme Court announced that it would take up two cases related to same-sex couples: Windsor, which arose out of an estate tax dispute between a surviving partner/spouse and the IRS; and Hollingsworth v. Perry (CA-9, Feb. 7, 2012), which addressed whether the equal protection clause of the Fourteenth Amendment to the Constitution prohibits California from defining marriage as the union of a man and woman. The Supreme Court heard oral arguments in both cases in March 2013.

In Windsor, a long-time same-sex couple married in Canada in 2007. They had previously registered as domestic partners in New York City, where they made their home. One spouse died in 2009. Because of DOMA, the survivor did not qualify for the unlimited marital deduction under the Internal Revenue Code and as a result, the executor of the estate paid $363,000 in federal estate tax that was not otherwise due. The survivor as executor and sole beneficiary filed a refund claim under Code Sec. 2056(a) (under which property of a surviving spouse generally passes free of federal estate tax). The IRS determined that the survivor was not a spouse under Section 3 of DOMA and, therefore, not a surviving spouse under Code Sec. 2056(a). A federal district court found that Section 3 of DOMA violated the equal protection clause of the Fourteenth Amendment because there was no rational basis to support it. The Second Circuit Court of Appeals affirmed the lower’s court decision, finding that homosexuals are a protected class and that Section 3 of DOMA was not substantially related to an important government interest and violated Equal Protection.

Writing for the majority in Windsor, Justice Kennedy found that DOMA had departed from the long standing tradition and history of reliance on state law to define marriage. The State of New York had recognized the validity of same-sex marriages, which resulted in a status that “is a far-reaching legal acknowledgment of the intimate relationship between two people, a relationship deemed by the State worthy of dignity in the community equal with all other marriages,” Kennedy wrote. He reasoned that DOMA sought to injure this class of persons whom New York sought to protect, and by doing so violated basic due process and equal protection principles applicable to the federal government and was therefore unconstitutional.

DOMA’s operation in practice, Kennedy continued, was to treat same-sex marriages as second-class marriages for purposes of federal law “by imposing a system-wide enactment with no identified connection to any particular area of federal law.” DOMA’s principal purpose was to impose inequality, not for other reasons such as governmental efficiency, Kennedy held. Therefore, the majority found DOMA invalid for lack of a legitimate government purpose that could overcome the burden on those within the class whose personhood and dignity New York had sought to protect through its marriage laws. We cater to Bergen County CPA tax preparation in New Jersey since we are a Bergen county accountant firm.

For assistance with this or other tax or accounting matters please contact us at 201-947-8081 or 646-688-2707 or email us at


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