Business Law Prediction About United States V. Windsor’ Case. Prediction about United States v. Windsor’ Case In studying of the United States v. Windsor’s case and additional cases and resources, I think the best and the optimistic result of the United States v. Windsor’s case is that the Supreme Court will hold the Section 3 of the. An animated case brief of United States v. Windsor, 133 S.Ct. Read the text case brief at In 2007, two women.
Executive Summary
When the Supreme Court struck down Section 3 of the Defense of Marriage Act on June 26th in the case of United States v. Windsor, it forced the Federal government to recognize whether or not a couple was married based on the rules of the state. If the state declared that the marriage was valid, the Federal government had to honor it as well, though whether the the marriage would be recognized in the first place was still left up to the state.
While this was fairly straightforward to apply for many couples – if they got married in one of the 13 states (plus the District of Columbia) that allows for same-sex marriage they would be married for state and Federal purposes, and if they were in a state that didn’t allow such marriages then being unable to get married at the state level would leave them unmarried at the Federal level, too. Yet unfortunately, this also introduced a significant complication in today’s increasingly mobile world: if a couple got married in a state that allowed the marriage and then relocated to a state that didn’t recognize the marriage, were the rules for marital status based on the state the couple currently resided in, or the state in which they celebrated their marriage in the first place?
Fortunately, an announcement last week by the U.S. Treasury, accompanied by Revenue Ruling 2013-17 from the IRS, declared that all legal same-sex marriages would be recognized for Federal tax purposes, regardless of what state the couple currently resides in. In other words, as long as the marriage was legal in the state in which the marriage itself occurred, the IRS will follow the laws of the “place of celebration” in determining legal marital status, for both income and estate tax purposes. As a result, planners need to review the current income and estate tax situation for such couples, from the potential for filing amended income, gift, and estate tax returns, to reviewing the treatment of employee benefits, to re-evaluating whether it’s time to update estate planning documents and gifting strategies in light of the new availability of the marital deduction!
Details Of IRS Revenue Ruling 2013-17
The new guidance from Treasury and the IRS declare that any same-sex married legally entered into in one of the 50 states, the District of Columbia, a U.S. territory, or a foreign country, will be covered by the ruling, as long as the marriage was in fact legal where it occurred. Notably, the ruling does not apply to registered domestic partnerships or civil unions.
The IRS bases its approach on Revenue Ruling 58-66, which more than 50 years ago declared that in the case of common-law marriages, such marriages should be recognized even if the couple subsequently moves to a state that requires a ceremony to establish the marital relationship and doesn’t otherwise recognize the marriage. As the IRS states, “a rule under which a couple’s marital status could change simply by moving from one state to another state would be prohibitively difficult and costly for the Service to administer, and for many taxpayers to apply.” Not only would such changes impact filing status outright, but could create further complexity in situations where attribution of family property interests applies (in certain controlled business ownership circumstances), where employers have employees who relocate (forcing employers to track marital status for their employees for various employee benefits, tax withholding, etc.), where beneficiaries are trying to determine the treatment of qualified plans, etc.
Overall, the IRS expressed concern that to treatment same-sex couples on a state-of-residency rule would require the development of extensive costly systems to administer and oversee a couple’s changing marital status in an increasingly mobile world. Given all of these challenges, and in light of the Windsor case similarly declaring that the Federal government must recognize same-sex marriage in states where it is initially recognized at the time of marriage, the new guidance ultimately declares that a change in domicile to another state will not alter marital status for Federal tax purposes.
Notably, the IRS and Treasury indicated that they will begin to apply the rules effective September 16th, which actually gives employers relatively little time to adjust and update their systems for any employee benefits related to same-sex couple employees. However, the IRS has indicated that it still need to issue further clarification about the proper treatment of retirement plans and other employee benefits for same-sex couples in retroactive situations that may have occurred before the effective date of the Revenue Ruling.
Immediate Same-Sex Couples Planning Opportunities
For financial planning purposes, the most notable aspect of the new ruling is simply to recognize that starting with 2013 itself (or actually 2012, for any couples still on extension through October 15th), same-sex married couples will be required to file jointly as a married couple (or as married filing separately, with all the associated adverse consequences), and similarly will claim deductions and tax credits (from the earned income tax credit to the child tax credit to college education credits and more) as a married couple. In some cases – especially with dual income couples – this can actually result in a greater tax liability, due to the so-called “marriage penalty” that will now apply for same-sex couples (on the other hand, couples with a significant income disparity may find their tax burden lower as a married couple).
In addition, the confirmation of marital status for all same-sex married couples – regardless of where they currently live – also reinforces the need for such couples to re-evaluate whether to file Form 1040X to amend tax returns for any prior years available under the statute of limitations (generally, it would be 2010, 2011, and 2012). As just noted, not all couples will want to file an amended return – in some cases with the marriage penalty, it may be preferable to leave the prior returns as is – but any same-sex couples who were married in those prior years should at least evaluate whether an amended return might result in an immediate refund.
In the gift tax context, any same-sex couples who filed a Form 709 gift tax return for transfers between the couple after they were legally married (or even pursuant to a legal divorce) will want to file Form 843 to amend gift tax returns to claim the marital deduction and avoid the use of any of their lifetime gift tax exemption amount. Similarly, any widows of same-sex couples where there was an estate tax paid may wish to file to amend the estate tax return to claim the marital deduction and recover the Federal estate taxes paid, if within the statute of limitations.
Planners with same-sex couples should also review the current status of their employee benefits. With Federal recognition of the marriage – regardless of the current state of residence – same-sex spouses are now eligible for everything from spousal protections for qualified plan benefits to favorable treatment for employer health insurance. Tax withholdings may need to be adjusted as well. And in cases where benefits (like health insurance) are now excluded from income, employers may wish to file a refund for payroll taxes as well.
Long-Term Planning Implications Of Revenue Ruling 2013-17
In the longer-term, the fact that the marriages of same-sex couples will be recognized not only for Federal income tax purposes, but also gift and estate taxes, including the marital deduction, means that most same-sex couples will need to update their estate planning documents. Estate plans that relied heavily on trusts to hold property and ILITs to fund estate tax liabilities may no longer be necessary, due both to the availability of the marital deduction and the potential to claim portability of a deceased spouse’s unused estate tax exemption, and couples may wish to simply adopt easier and simpler estate plans. On the other hand, it’s notable that because the marriage still may not be recognized for state estate and inheritance tax purposes, some couples will need to be cognizant that while Federal estate taxes are relieved, state estate taxes are still an issue.
Overall, the good news of the ruling in planning for same-sex couples is that moving to another state – or living in different states – will no longer create such messy scenarios for Federal income, gift, and estate taxes. On the other hand, because the treatment still varies by state, same-sex marriage couples in states that don’t recognize the marriage may end out filing jointly for Federal purposes, but individuals for state purposes, in addition to the state estate tax complications noted earlier. And financial and health care power of attorney documents will remain crucial in states that don’t recognize the marriage, if the same-sex couple wants to ensure the power to make financial and health decisions for a spouse.
It’s also important to note that rules for same-sex couples are still not uniform across all Federal agencies. While the IRS has effectively adopted a “place of celebration” rule, the Social Security Administration has thus far only announced the payment of spousal and survivor benefits to same-sex couples currently residing in a state that recognized the marriage. Similarly, the Department of Labor has interpreted the Family Medical Leave Act (FMLA) to still only apply based on the state of residence. In some of these scenarios, it may ultimately require an Act of Congress to adjust the rules legislated for the agencies to allow a “place of celebration” treatment for determining marital status.
The whole doc is available only for registered usersOPEN DOC
Download:.docx
Get Full Essay
Get access to this section to get all the help you need with your essay and educational goals.
Get AccessBusiness Law Prediction About United States V. Windsor’ Case
Prediction about United States v. Windsor’ Case In studying of the United States v. Windsor’s case and additional cases and resources, I think the best and the optimistic result of the United States v. Windsor’s case is that the Supreme Court will hold the Section 3 of the Defense of Marriage Act unconstitutionally. But I think that there are some assumptions in advance. Especially eliminating the religious factor and the majority of people’s traditional interests are necessary. These factors have pretty big influences on the final result. In general, my prediction is conceptually and ideally.
Under DOMA, I believe that two sections create the most conflicts and disputes. The Section 2 of DOMA says “no state has an obligation to recognize marriages that same-sex couples legally entered into in another state” and Section 3 of DOMA points out that “the Federal government does not have to recognize or honor marriage that same-sex couples legally entered into anywhere”. The Section 3 of DOMA leads the most serious consequence and I think it is unconstitutional. By gathering different information, briefly, I found out that same-sex couples are denied the rights, responsibilities and protections under around 1100 rights.
For example, in Windsor’s case, her marriage relationship is only recognized by New York State but the Federal government. Edie Windsor has to pay Federal $363,000 taxes in order to get her “wife’s property”. However, if she is not a lesbian, she will not require paying a penny to the Federal government. DOMA states that: “Marriage means only a legal union between one man and one woman as husband and wife, and the word spouse refers only to a person of the opposite sex who is a husband or a wife. (Defense of Marriage Act) Based on this fact, Federal denied Windsor’s rights to get the assets from her dead “wife” since they are not recognized marriage. Furthermore, implied this law to more same-sex couples, they are denied the social security benefits, pension protections and so on. In my opinion, DOMA potentially made the court treats people differently based on whether they are recognized as legally married or not. To support my prediction, my first argument is that the Section 3 of DOMA violates the Equal Protection Clause.
The Clause states: “The constitutional guarantee that no person or class of persons shall be denied the same protection of the laws that is enjoyed by other persons or other classes in like circumstances in their lives, liberty, property, and pursuit of happiness. ”(“The Constitution of the United States,” Amendment 5. Equal Protection 1868) I think by the law that firstly classifications of different groups must be reasonable, not arbitrary. People in a similar situation should be treated alike too.
Apply the main idea of Equal Protection Clause to the case, the fact of Windsor receiving her partner’s inheritance has no difference to the others. But people obviously differentiated same-sex couples unreasonably. Meanwhile, the classifications cannot draw for the purpose of disadvantaging a group by measuring it by traditionally disliked or misunderstood. Considering Windsor’s case again, she is not only classified arbitrary but also disadvantaging by this classification. In addition, in the case Lawrence v. Texas, the Supreme Court made same-sex sexual activity legally in every U.
S. state and territory. I think the court has already considered more about the nature of the interests affected by a classification and exercised much greater caution in evaluating classifications that disadvantage important “personal relationships” and liberty interests. In summary, firstly, it is clearly that the same-sex couples disadvantaged by DOMA have historically been mistreated. 2nd, despite considering the burdens imposed by DOMA on the same-sex couples, the family and liberty interests at stake are certainly substantial.
Then in considering of these burdens, they have negative touches on many areas such as taxes, legal protections, pension plans, insurance benefits. So in this view, same-sex couples should be recognized and reviewed by the Equal Protection Clause. My second argument is that the Section 3 of DOMA violates the Due Process Clause. The Clause states: “Nor shall any State deprive any person of life, liberty, or property, without due process of law … ” (“The Constitution of the United States,” Amendment 5.
Due Process 1868) Under the Due Process Clause, it also interprets that no state can deprive its citizens of rights and freedoms. In the Lawrence’ case again, the Supreme Court held that same sex activity was part of the liberty protected by substantive due process under the 5th Amendment. In addition, the Full Faith and Credit Clause require one state to honor contracts made in another state. The clause states: “Full Faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state.
And the Congress may by general laws prescribe the manner in which such acts, records and proceedings shall be proved, and the effect thereof. ” (Full Faith and Credit Clause of the Constitution (Article IV, Section 1)) Similar to what we learned from the class, someone’s driver’s license in Ohio should be recognized or honored in other states. However, the Section 3 of DOMA enables states to not recognize and honor the Full Faith and Credit Clause with respect to marriage, based upon the genders. So I believe that DOMA violates Full Faith and Credit Clause. My 3rd argument is the Section 3 violates the 10th Amendment.
In the last Bill of rights, it clearly states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. ” By looking at the law, I think the Constitution law limits congressional authority. Based on what I knew, there are 9 states recognized same-sex marriage and the power are suppose reserved to the States regarding to the 10th Amendment. It means that gays or lesbians who were legally married in some states but still unable to qualify for federal spousal benefit were met with disapproval.
So I think the Federal government has controlled too much and the Congress even does not have authority to pass DOMA in the first place. Despites those reasons above, a fundamental reason for against DOMA that I think marriage is a basic human right and everyone should have it. People want a life-lone relationship is a human need that should not be denied based on the gender. In addition, from the civil rights sight, the same-sex couples not only disadvantaged by the DOMA Section 3 but also discriminated by section 3.
Under Civil Rights Act, it prohibits discrimination on the basis of race, color, religion, sex or national origin. Due to these reasons, the same-sex couples cannot adopt kids and cannot live in a normally life. Because of DOMA Section 3, their fundamental human rights are not being protected. In conclusion, based on all the reasons I mentioned above, it against the Equal Protection Clause, Due Process Clause, Full Faith and Credit Clause, 10th Amendment. I think the Supreme Court will deny the Section 3 of DOMA and hold it unconstitutionally. References:
Buffett, Mary. “On Gay Marriage and Civil Rights for All. “Huff Post. (2013): n. page. Web. 15 Apr. 2013. <http://www. huffingtonpost. com/mary-buffett/on-gay-marriage-and-civil_b_2994891. html>. KEN, KLUKOWSKI. “HIGHLIGHTS FROM SUPREME COURT DOMA ARGUMENTS. ” (2013): n. page. Web. 15 Apr. 2013. <http://www. breitbart. com/Big-Government/2013/03/30/Highlights-from-Supreme-Court-DOMA-arguments>. ARI EZRA WALDMAN, . “The DOMA Cases — The 10th Amendment Tango Read more: http://www. towleroad. com/2011/01/the-doma-cases-the-10th-amendment-tango. html
UNITED STATES COURT OF APPEALS 3 4 FOR THE SECOND CIRCUIT. Windsor v. United States. 2013. Web. <http://www. ca2. uscourts. gov/decisions/isysquery/4508c209-d9ba-4fd0-a7cb-7c237e4f58fd/1/doc/12-2335_complete_opn. pdf WHY THE FEDERAL “DEFENSE OF MARRIAGE” ACT (DOMA) IS UNCONSTITUTIONAL. Web. <http://www. ucc. org/assets/pdfs/emr21. pdf>. Kevin M. Cathcart, . “From Sex to Marriage: How We Got From Lawrence v. Texas to the Cases Against DOMA and Prop 8. ” Lambda Legal. (2013): n. page. Web. 15 Apr. 2013. <http://www. lambdalegal. org/blog/from-sex-to-marriage-intro>. Virginia E. McGarrity, . Defense of Marriage Act Ruled Unconstitutional by Federal Appeals Court. ” (2013): n. page. Web. 15 Apr. 2013. <http://www. americanbar. org/newsletter/publications/aba_health_esource_home/aba_health_law_esource_0812_mcgarrity. html>. BRAD BANNON, . “Why the Supreme Court Will Rule in Favor of Gay Marriage. ” USNews. (2013): n. page. Web. 15 Apr. 2013. <http://www. usnews. com/opinion/blogs/brad-bannon/2012/12/12/why-the-supreme-court-will-rule-in-favor-of-gay-marriage>. “DOMA arguments: Audio and transcript from the Supreme Court. ” Los Angeles Times. (2013): n. page. Web. 15 Apr. 2013.