DOMA's Demise Opens Door For Tax Refunds For Some Same-Sex Couples

On June 26, 2013, the Supreme Court ruled that Section 3 of the Defense of Marriage Act (DOMA) is unconstitutional as it violates the due process and equal protection clauses under the Constitution.  Edith Windsor brought the case,  United States v. Windsor,  after the death of her spouse, Thea Spyer.  Spyer's estate  was required to pay more than $363,000 in federal estate taxes related to the inheritance of her spouse's estate.   If allowed the same status as a heterosexual  spouse, Windsor would have qualified for an unlimited spousal deduction, and paid no federal estate taxes.  With the demise of DOMA, married same-sex couples who paid estate or gift tax on gifts or bequests between spouses may be able to claim a refund of the tax paid.  If you can potentially make a refund claim, you should file that claim as soon as possible.  

The part of DOMA that was struck down provided that the word '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.  As a result of the Windsor decision, anyone who is considered married under applicable state law will be treated as married for federal law purposes, including most provisions of the Internal Revenue Code.  (The Windsor case did not involve Section 2 of DOMA, which says that no state is required to recognize a same-sex marriage that occurred under the laws of another state.)  Since the issue is one of constitutional law, the invalidation of the definition of marriage in DOMA is effective retroactively.

The Internal Revenue Code limits the time to file a claim for refund.  In general, a claim for refund must be filed within 3 years of the date on which the return was due (including extensions), or within 2 years of the date of the payment of the tax, if that date is later.  Without action by Congress to change the applicable statute of limitations, claims filed beyond that date would be time barred.  Any person with this issue who could potentially make a claim for refund should file that claim as soon as possible.  

This article is designed to give general information on the developments covered, not to serve as legal advice related to specific situations or as a legal opinion. Counsel should be consulted for legal advice.