Same sex marriage

[SunTaxMan]

Now, if a same sex couple comes in, male or female, and tells me they are married, do I need to question whether they indeed are married? I normally obtain SS cards and some photo ID (usually driver's license). If ID provided shows two different last names, how much questioning should I do / do I need to do?

I guess, at this point, it would be good to know if, in same sex marriages, DOES one of the partners change they last name to match their new mate?

Thanks.

[jklcpa]

Why would you not treat the couple as you would any heterosexual couple on these points? Whatever your firm's policy is for documentation, that is what you should follow. If the couple says they are married, why wouldn't you accept that?  Don't you accept their word from "straight" couples?  The State of MD has recognized same sex marriages for the last 2 1/2 years, so I am assuming you haven't had any of these returns to prepare yet.

The partners' change of names is a matter of choice, and in some states has been difficult for one or both to change names. It is a matter of state law at this point about the limitations on name changes. If the state allows, they may each retain their existing names just as some heterosexual couples do also, one may choose to take the name of his or her spouse, they may both decide to change names to a hyphenated version of both names, or they may decide on an entirely new name that establishes an identity of their family.

Really, I'd just ask them like you would any other newly married couple if they've notified the SSA of any name change and if the SS cards you are presented accurately reflects their current names since being married. You might also consider asking if they have a preference about whose name appears as the primary name on the returns.

[MDEA]

I require no proof of marriage if they say they are married they are.  My problem is married people saying they are not married. Every year I have people who have filed as unmarried come in when they go to do something and now need a return MFJ . Most of the time we have done only one of their returns.

[Gail in Virginia]

I agree with MDEA - it is usually married people telling me they are single I have a problem with but I don't know how to get someone to prove a negative.  If we originally had them as married, I could ask to see their divorce papers but we had one gentleman that I did his return for 10 years filing him as single, his previous preparer had filed him as single on the return that I saw when we started with him, and then he came in and asked me to notarized some paperwork for another state because he was getting divorced.  To me that is a much bigger problem.

[Pacun]

In old days, being married was more benefitial taxwise. These days women make about the same amount of money or more, so being married is punished at tax time. So when people tell you they are married, 99.9% of the time they are. As everybody said, the concern is people who are married and they say they are single or HH when you interview them.

I am taking out my crystal ball and eventually (may 10 years later) the IRS will go after those people who are married and file Single or HH when they see that they are included in the health insurance plan of their spouse. I am eager for that to happen because as other poster have said, people come to us and say they are single when in reality they are married.

A simple math will show how easy it is for people to benefit by saying they are not married. You have a married couple and they come to you and they say they are single. They have no children but they have a house. The husband makes 50K and they own a house. He has a 1098 showing he paid 12K in interest and 3K in RE taxes. You go ahead and file both as single and they get in itemized deduction and standard deduction about 20K. The same couple will only get about 15K of itemized deductions if they file jointly. If they have children and EIC credit is involved, the benefits of lying are even bigger. The only way to stop that is to match when they report get the report from the employers if they can see who has spouses on the health insurance plan.

The only other way of solving that issue is for the IRS to have live access to every single marriage and every single divorce in every single state and every single country of the planet. Now you know why people lie... there is no way for the IRS to figure it out but Obama care might provide a tool for the IRS.

[Gail in Virginia]

Nice in theory, Pacun, but my husband and I have not been on the same insurance plan in years.  So if we were minded to lie about our marital status, the insurance would not be what tripped us up.

[JohnH]

IRS won't need to go to those lengths. 

All they need to do is devise a penalty to assess against the preparer for failing to follow due diligence in verifying marital status. 

That solves their problem nicely.

[Pacun]

John,

How can you as my tax preparer verify if I am married? If I bring my only W-2 as single, I say I am not married, I tell you I live with my girlfriend and I have a child and I use the standard deduction. Oops, for a moment I forgot that my name was Brad Pitt.

Gail, then the IRS will not have a chance to prove you are married even with Obama care.

Maybe you have properties together with your husband and a 1098 forms gets to the IRS listing both names and someone at the IRS physically reads it.

[JohnH]

John,

How can you as my tax preparer verify if I am married?

Right now I take your word for it.  But let's fast forward to 2016 and think about a hypthetical .

->> Sorry, I can't take your word for it any more.  IRS told me that beginning this year I must verify marital status for all clients. I need to see your marriage license and you need to sign this statement for my records that you haven't divorced since that date.  I can't just limit this due diligence to same sex couples, or even just new clients, because that would be discrimination.  So I have to do this for every client, even though I've known you for years - maybe even attended your wedding.  Otherwise I'm subject to a $500 fine for each failure. (or substitute whatever fine you think is likely.  The EIC due diligence requirments might give you an idea of how far they feel they can go).  <<-

IRS has already done a very good job of making tax preparers unpaid data entry clerks.  I see lots of preparers who ae very proud of their efficiency at this clerical task.  IRS has made the preparer responsible for getting the returns filed on time - another clerical task having nothing to do with tax prpearation skills.  They've begun to make preparers unpaid auditors, at least for EIC. So why woudl they not just keep tightening the noose?  They have everything to gain and nothing to lose.  You, on the other hand...

Edited July 2, 2015 by JohnH

[Pacun]

Correct John, but how can I prove to you that I am single? Most of the posters agree that the bigger problem is that married people come to us as single.

The only country that requires an affidavit of "singleness" is Cuba and with the new events, that will be abolished.

[JohnH]

Right now, the client's signature on the organizer and/or the engagament letter is sufficient.  Don't count on that always being the case in the future.

Edited July 2, 2015 by JohnH

[Jack from Ohio]

In Ohio, this ruling eliminates the requirement of filing same sex couples as single for State of Ohio return, and married for Federal.  This was an unfair tax advantage for same-sex couples as OH says you must file the OH return with the same status as the Federal.  Now the playing field here in OH is level again.

[easytax]

In Ohio, this ruling eliminates the requirement of filing same sex couples as single for State of Ohio return, and married for Federal.  This was an unfair tax advantage for same-sex couples as OH says you must file the OH return with the same status as the Federal.  Now the playing field here in OH is level again.

Jack,    Did this not mean the client was fraudulent to either the state or the fed's?    If OH made them file single and they had to have the same as for fed's but were actually legally married --- then they (and you if you in fact knew) lied and committed perjury when signing the return.

 

Either way, even if forced --- the government made that person a criminal and possibly (just to be nice, as it is a fact) the preparer too.

[Abby Normal]

AFAIK there is no system to track anyone's marital status, so it's not verifiable, which means we pretty much have to take their word for it.

[Jack from Ohio]

In Ohio, this ruling eliminates the requirement of filing same sex couples as single for State of Ohio return, and married for Federal.  This was an unfair tax advantage for same-sex couples as OH says you must file the OH return with the same status as the Federal.  Now the playing field here in OH is level again.

 

Jack,    Did this not mean the client was fraudulent to either the state or the fed's?    If OH made them file single and they had to have the same as for fed's but were actually legally married --- then they (and you if you in fact knew) lied and committed perjury when signing the return.

 

Either way, even if forced --- the government made that person a criminal and possibly (just to be nice, as it is a fact) the preparer too.

Not fraudulent.  Before this latest ruling, legally married same-sex couples were (still are) required to filed Federal returns as MFJ or MFS.  If a same-sex couple were legally married in a state that recognized it, then move to Ohio, the State of Ohio did not recognize their marriage, so the tax returns for the State had to be single.

Traditional married couples had to file State of Ohio with the exact same status as their Federal return.  If MFJ on Federal, then MFJ was the only option on State.

This ability to file married for Federal and single for State of Ohio is a major tax break for the same-sex couples due to the structure of the tax tables in Ohio.  Many couples would benefit filing separate or single with the State but file joint with the Federal.  Before the latest ruling, this was an unfair tax advantage given to same-sex couples.

With this latest ruling, the unfair advantage has been removed and now same-sex couples must use the same status on State of Ohio as Federal.

For the record, there were already lawsuits being prepared by groups representing traditional married couples in Ohio to demand equality.  Now it is a moot point.

[Max W]

AFAIK there is no system to track anyone's marital status, so it's not verifiable, which means we pretty much have to take their word for it.

Marriage records are public and available at the county recorder's office.  A lot of them are on line. 

Divorce records are on file with the court where the divorce was filed.  These may be harder to get.

Search sites like Intellius and others might also have the info, but the reliability is sometimes questionable as you might

have a gotten someone with a similar name.

Is it worth the hassle? Don't think so. I would just have the questions in a tax organizer and have both sign it.

 

[kcjenkins]

Makes me think about a situation I ran into, that might be a warning for someone else.  I was married many years ago, at age 18, we eloped and got married secretly.  Had my marriage certificate in a lock box at home when the house burned down.  I got new copies of our birth certificates, but did not even think about the marriage certificate.  Well, when I moved out to CA, I had to get a CA driver's lic, and they wanted to see proof of who I was, birth certificate AND marriage lic.  Because of how we got married, I was not even sure in which county we got married, and AR records are not on-line for most counties, so I had a terrible time getting proof of my legal name, even after 50 yrs of marriage.  I ended up with a driver's lic in my maiden name for 5 months!   I can just imagine the problems that could have caused me.  

So, a word of advice,  if you don't already have certified copies of ALL your legal identity documents, get them now, before you need them.  

[Pacun]

Marriage records are public and available at the county recorder's office.  A lot of them are on line. 

Divorce records are on file with the court where the divorce was filed.  These may be harder to get.

Search sites like Intellius and others might also have the info, but the reliability is sometimes questionable as you might

have a gotten someone with a similar name.

Is it worth the hassle? Don't think so. I would just have the questions in a tax organizer and have both sign it.

 

I wonder if Intelius will help for someone who married in El Salvador. Or someone who married in the U.S. and got divorced in El Salvador. I can only imagine how they could track marriages that took places in dirt road and mosquito infested churches like the one in my ex-village. Remember that as long as marriage was recognized in a foreign country and as long as that married didn't violate local laws, it is legit.

As I said before, there are too many places where you can get married in this planet and there are also so many places to get a divorce that not even intellius know what it is doing in some cases.

[JohnH]

All true, but oddball circumstances & outliers won't matter if IRS decides to hold you responsible for verifying marital status. You'll either do the due diligence they require, or expose yourself to penalties if you don't .  Exactly like they are already doing with the EIC.  

And you will find yourself deciding if there may be returns you simply don't  want to prepare because of the additional penalty risks (exactly like I and many others are already doing with EIC). The difference will be that you could then find yourself on the wrong side of a discrimination lawsuit when it comes to marital status.  So in the end, you will probably have to adopt a policy that you won't complete a return for anyone if the client can't provide acceptable proof of their maritual status, no matter whether it is opposite sex or any of the other definitions beginning to come down the pike. 

Edited July 3, 2015 by JohnH

[Gail in Virginia]

Maybe we could get congress to do away with filing status - everyone files their own return based on their own income with no dependent exemptions or special tax rates according to filing status.  If you own assets such as rental property or stocks/bank accounts jointly, you must each report 1/2 of the income.  Then it won't matter whether you are married or to whom. 

Never happen.

[JohnH]

The plot thickens.  A man in Montana who practices polygamy applied for a marriage license to enable him to legally marry one of his "sister wives".   So if that additional bit of idiocy flies, then why not get a license for the 3rd, 4th, and so on?  Eventually the "spouse" line could just say "see attached statement", with a listing of everyone who legally qualifies as a spouse.  The possiblities are endless.  

Edited July 5, 2015 by JohnH

[Abby Normal]

Will be interesting to see the legal arguments for/against polygamy and polyandry, but I don't think most people have any interest in it. One wife is more than enough for me!

[Terry D EA]

I agree we just take their word for it. Had a client this year slip up and tell me he was married after hiding his illegal wife for several years. Does this put me in an unfavorable position? I have a document that each of my client(s) sign that includes a jurat statement which is my due diligence. So, I feel I am covered. I did tell this client he has to amend to include his wife back at least three years when she became legal and for the other years she needed an ITIN. Haven't heard from him since, go figure.  Again, always believe them???? I think it is senseless for us to have to scrutinize every client with every piece of their information. Pacun good theories but can't verify everything and as you say marriages and divorces can take place any where.

[Jack from Ohio]

I would like to hear if anyone has had to defend the filing status and verify marriage or lack of during an audit.  Anything else we say has no value.  Until it passes the scrutiny of audit, we cannot say it is "acceptable" or "accepted."

[Catherine]

Maybe we could get congress to do away with filing status - everyone files their own return based on their own income with no dependent exemptions or special tax rates according to filing status.  If you own assets such as rental property or stocks/bank accounts jointly, you must each report 1/2 of the income.  Then it won't matter whether you are married or to whom. 

Never happen.

That's the way Canada does it.  Every person files by themselves.  NO status issues, ever.  One of the things they definitely get right.