Press Release: GSBA Convenes Roundtable on Federal Taxation Inequalities for Same-Sex Couples

[Press release available on the GSBA website]
 
Media Contact: Matt Landers, Public Policy & Communications Coordinator, Greater Seattle Business Association, 206.363.9188, mattl@thegsba.org

GSBA Convenes Roundtable on Federal Taxation Inequities for Same-Sex Couples

Tax, Legal and Financial Professionals Discuss the Implications of the Defense of Marriage Act on Marriage Equality in Washington State

SEATTLE – The Greater Seattle Business Association (GSBA) held its fourth roundtable on federal tax inequities on Wednesday, January 23. The GSBA Professional Roundtable, a project of GSBA’s Public Policy Task Force, was created in 2011 to address the IRS ruling mandating income splitting for same-sex registered domestic partners and same-sex married couples. The GSBA Professional Roundtable continues to meet to discuss the changing legal landscape in the wake of the approval of Referendum 74 by Washington State voters in November 2012.

Given the lack of clarity from the IRS and the complexity of the IRS’ new tax requirements, GSBA, as this region’s LGBT and allied chamber of commerce, took a leadership role to bring together professionals in tax-related professions to share information and provide resources for other professionals who work with same-sex registered domestic partners married couples.

Since 2007, Washington State has made Registered Domestic Partnerships available to same-sex couples, and marriage since December 6, 2012. The IRS requires that legally recognized same-sex spouses and domestic partners residing in community property states such as Washington split their income, with one-half of each other’s income being attributed to the other spouse or partner and each reporting such community property split income on their individual federal tax returns. Different sex married spouses can file one joint federal tax return, but registered domestic partners and married same-sex spouses must file separate individual federal tax returns, because the Defense of Marriage Act (DOMA) prohibits federal recognition of  same-sex relationships legally recognized by a State.  The manner in which the IRS requires members of same-sex couples to prepare their tax returns is complicated, burdensome and often more expensive than the preparation of single joint returns for different sex married couples.

The GSBA Professional Roundtable is a brain trust and provides a forum at which dozens of GSBA-member tax, financial and legal professionals are able to share their experiences with one another on how to properly file federal tax returns for legally recognized same-sex couples and to best protect their income and assets. CPAs, tax preparers and attorneys in community property states have demanded that the IRS provide clarity and issue guidance related to separate, joint and community property and income splitting. While the IRS has provided limited useful guidance, tax and legal professionals together have created best practices for filing and strategies when IRS agents unaware of their own policies improperly reject the tax returns.

Representatives from the offices of Senators Maria Cantwell and Patty Murray, as well as Congress Members Suzan DelBene, Jim McDermott and Adam Smith have attended GSBA roundtables to listen to their constituents’ concerns regarding the confusion of income splitting and the many ways that DOMA discriminates and adversely impacts LGBT families.

GSBA is forming ad hoc committees to further educate and advocate on these issues. One committee will focus on professional advocacy with members of the Roundtable reaching out to others in their respective fields to ensure that the wider profession is aware of the requirements and challenges. The aim of the second group is to work on community education and with our elected officials towards tax equity for LGBT families. Anyone interested in participating in either group should contact Matt Landers.

[post updated on 1/30/13]