Two New Lawsuits Challenge DOMA Regarding Tax Issues

Two lawsuits have been filed this week which challenge the Federal Defense of Marriage Act of 1996 (DOMA).  DOMA defines marriage, for federal government purposes, as being ONLY between a man and a woman.  As we have blogged about before at the Dinesen Tax Times, this creates unique headaches for same-sex couples who are legally married under state law, such as here in Iowa.  The federal government does not recognize same-sex marriages, period.

One lawsuit filed in a Manhattan federal court by a woman named Edith Schlain Windsor involves the estate tax.  In this case, Edith and her same-sex spouse, Thea Spyer, were married in Canada but lived in New York.  The state of New York recognized their marriage, but the federal government did not.  When Thea died in 2009, more than $350,000 in estate taxes were assessed, even though Edith was the beneficiary.  If they had been an opposite-sex couple, the "unlimited marital deduction" would likely have applied, and no estate tax would have been assessed.

The other lawsuit was filed in federal court in Connecticut and involves federal employees who are legally married under state law to a same-sex spouse.  According to the Wall Street Journal, "The lawsuit alleges the couples were denied certain benefits because their marriages aren't recognized under federal law, including work leave to care for a spouse and retirement or survivor benefits."