On July 8, 2010, the United States District Court sitting in Massachusetts, Judge Tauro presiding, ruled on two landmark cases that mark the demise of DOMA. The decisions, which overturn portions of DOMA and which foreshadow the end of separate and unequal treatment for married gay spouses, will likely be appealed to the United States Court of Appeals for the First Circuit in Boston. At present, the decisions are stayed pending appeal, which means that DOMA is still, albeit tentatively, in effect.
One case, known as Gill v. Office of Personal Management was filed by individuals, all Massachusetts same-sex married couples, who were denied marital rights and protections due to DOMA’s prohibition of federal government recognition of marriages between spouses of the same sex. The lawsuit was filed by GLAD, through Mary Bonauto. Gill involves gay people in Massachusetts who are currently married. The plaintiffs in Gill argued that federal government agencies should treat same-sex marriages in the same way it treats heterosexual marriages. The plaintiffs argued that the federal government’s differing treatment of straight versus gay married couples violates the equal protection principles embodied in our United States Constitution.
The other case, Commonwealth of Massachusetts v. Department of Health and Human Services, was filed by Attorney General Martha Coakley not on behalf of particular plaintiffs, but on behalf of the people of the Commonwealth. As in Gill, this lawsuit sought to require fair treatment of Massachusetts married same-sex couples by the federal government. This lawsuit challenged the federal government’s right to reach its authoritative hand into such private and state-controlled matters as marriages and marital statuses. In other words, the Commonwealth argued that the Tenth Amendment of the United States Constitution prevents the federal government from interfering with Massachusetts’ determination of the marital status of gay people who have engaged in a civil marriage.
Each case was decided based on a procedural mechanism in litigation known as summary judgment by which a substantive decision is made on the merits of the case based on existing law. The summary judgment motions of the plaintiffs requested that the court rule on the law in their favor, finding that DOMA as applied to Massachusetts same-sex married couples is unconstitutional. Indeed, Judge Tauro granted summary judgment to the plaintiffs in both cases. Concurrently, the federal government, as defendant, asked Judge Tauro to dismiss both lawsuits, which the Judge refused to do.
By ruling in favor of the plaintiff’s in both cases, Judge Tauro decided that the federal government must respect the state’s decision to regard and treat gay married couples exactly as it regards and treats straight married couples for the purpose of conferring federal benefits such as, among others, Veteran’s and Social Security benefits. Veteran’s and Social Security benefits are highly consequential to older lesbians and gay men, and can be the difference between spousal survival and spousal impoverishment after retirement. A major benefit that impacts lesbians and gay men across all age bands is the ability to file federal taxes using marital filing statuses, and the ability to take advantage of federal tax laws that make transfers of assets incident to divorce, a tax-free event. Especially with respect to the divorce laws, since DOMA requires that a marriage can only occur between one man and one woman, and since the federal government denies marriages between same-sex couples, the federal taxing authority views alimony and division of marital assets between married gay men and married lesbians as taxable events. This is not so for heterosexual divorcing couples, who can transfer assets incident to their divorce without adverse tax consequence.
The United States Department of Justice is now deciding whether or not to appeal Judge Tauro’s rulings. If an appeal is filed, the cases will go up to the United States Circuit Court of Appeals. Depending on the outcome of that appeal, the then aggrieved party could appeal the decisions to the United States Supreme Court. With each appeal, the breadth of people impacted by the appellate decision will grow. Thus, a successful appeal will not only solidify the rulings; it will also encompass a vastly larger group of United States citizens such that the scope of the cases will no longer be limited to citizens within Massachusetts’ border.
Given the fact that the rulings are effectively stayed pending appeal, same-sex couples in Massachusetts will not get relief if they apply for federal marital rights and protections right now. It is not until the appeals are exhausted that we might see a change in the law.
Still, there are steps that can and should be taken now than might preserve your rights to retroactively equal treatment by taxing authorities if DOMA is found on appeal to be unconstitutional. The two decisions, while but district court decisions, serve as the basis for taking a tax position on a tax return with a proper disclosure statement since it means taking a position which is contrary to the regulations and other published IRS positions. At the same time, if the holdings of these two cases are sustained and you do not take steps now to preserve your rights, your claims might be forever lost due to having not pursued them within the applicable limitations period. Hence, when you are filing your tax returns as same-sex married persons or when you are filing an estate tax returns as the surviving spouse in a same-sex marriage, and where the marriage occurred in Massachusetts or where you were residents of Massachusetts and legally married in a state where same-sex marriages are permitted, consider with your lawyer taking a position that joint returns and marital deductions are allowable.