Proposed regulations: Defining “married couples” for tax purposes

Defining “married couples” for tax purposes

The Treasury Department and IRS today released for publication in the Federal Register a notice of proposed rulemaking concerning the definition of married couples for purposes of provisions in the Code.

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The proposed regulations [PDF 231 KB] note that after decisions of the U.S. Supreme Court, the IRS and Treasury determined that, for federal tax purposes, marriages of couples of the same-sex are to be treated the same as marriages of couples of the opposite-sex and that prior guidance using terms such as “husband,” “wife,” and “husband and wife” are to be interpreted in a neutral way to include same-sex spouses as well as opposite-sex spouses. Therefore, today’s proposed regulations amend the current regulations under section 7701 to provide that, for federal tax purposes, the terms “spouse,” “husband,” and “wife” mean an individual lawfully married to another individual, and the term “husband and wife” means two individuals lawfully married to each other. These definitions apply regardless of the individual’s sex.

The proposed regulations also provide that a marriage of two individuals will be recognized for federal tax purposes if that marriage would be recognized by any state, possession, or territory of the United States. Under this rule, whether a marriage conducted in a foreign jurisdiction will be recognized for federal tax purposes depends on whether that marriage would be recognized in at least one state, possession, or territory of the United States. 

Future guidance may be issued

While the proposed regulations define terms relating to marital status for federal tax purposes, today’s release states that the IRS may provide additional guidance as needed. For example, the IRS has already issued more particular guidance for employers regarding qualified retirement plans.  

Domestic partnerships, civil unions distinguished

Lastly, for federal tax purposes, the term “marriage” does not include registered domestic partnerships, civil unions, or other similar relationships recognized under state law that are not denominated as a marriage under that state’s law; and the terms “spouse,” “husband and wife,” “husband,” and “wife” do not include individuals who have entered into such a relationship. 

While some states extend all of the rights and responsibilities of marriage under state law to couples in registered domestic partnerships, civil unions, or other similar relationships, the proposed regulations note that those states intentionally determined not to denominate those relationships as marriages. Similar rules exist in some foreign jurisdictions. As explained in the preamble, treating couples in civil unions and registered domestic partnerships the same as married couples who are in a relationship denominated as marriage under state law could undermine the expectations certain couples have regarding the scope of their relationship. Further, no provision of the Code indicates that Congress intended to recognize as marriages civil unions, registered domestic partnerships, or similar relationships. Accordingly, these proposed regulations explain that the IRS will not treat civil unions, registered domestic partnerships, or other similar relationships as marriages for federal tax purposes.

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