IRS Goes After Gay Couples

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IRS Goes After Gay Couples

by Paul Johnson, 365Gay.com Washington Bureau Chief

March 2, 2006 - 12:01 am ET

(Washington) The Internal Revenue Service has begun warning tax preparers, businesses and state governments that same-sex couples legally married in Massachusetts or registered as domestic partners in states such as California and New Jersey must file separate income tax forms.

Tax returns this year must be filed by April 17.

Citing the so-called Federal Defense of Marriage Act the IRS says that the US government does not recognize anything other than legally married opposite-sex couples.

The law allows straight couples who are married to divide their incomes when they file jointly, usually meaning a lower tax rate.

"Not only does the federal government label gay relationships as unworthy but it then turns around and steals our money," Lambda Legal senior attorney David Buckle told 365Gay.com.

Attempts to file a joint returns could lead to fines or other penalties.

It is not the first time the IRS has issued a warning. A similar one came out after same-sex couple began marrying in Massachusetts.

Last year a federal judge dismissed a lawsuit filed by a gay couple in Minnesota claiming they deserved a tax refund because they were legally married and should be granted married taxpayer status.

People who receive health insurance from their state or local government or through their employer for their spouses or domestic partners are additionally hit with taxes.

Spousal health benefits are not taxed. But, since the IRS does not recognize gay relationships the benefits are considered income. In some cases the tax outweighs any savings.

Rhode Island extended health and insurance benefits to the domestic partners of state workers in 2001 but last month realized it had not withheld federal taxes on those benefits. Some workers owe up to five years in back taxes that the state forgot to collect through payroll deductions.

A study in 2004 shows that gay families pay on average higher taxes and get fewer benefits. (story)

The joint study by the Human Rights Campaign and the Urban Institute also found that when a gay or lesbian parent dies leaving a young child behind, the loss of Social Security survivor benefits to the family can range from $100,000 to $250,000, depending on whether state laws permitted both parents to establish a legal relationship to the surviving child.

On Tuesday the National Sexuality Resource Center released a new study showing widespread psychological and social harm inflicted on same-sex couples because they are denied the right to marry. (story)

©365Gay.com 2006

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