Same-sex married couples: Consider filing a Protective Claim for Tax Refund NOW


Being based in San Francisco, CA, our attorneys, CPAs, and staff watched thousands of same-sex couples marry at San Francisco and Oakland City Halls during the window of opportunity to do so.    If you are one of the nearly 18,000 same-sex couples that tied in knot in California before the passage of Proposition 8, you've probably been following the recent federal cases regarding the Defense of Marriage Act (DOMA). Now struck down in two separate courts, DOMA will reportedly be discussed in a closed-door conference at the U.S. Supreme Court on November 29, 2012 when it decides if it will hear any of the 10 pending appeals before it.

At this point we do not know if the Court will decide to hear any of the pending appeals, however, it is not un-likely that the country will at some point recognize same-sex marriages.   If and when the country does recognize same-sex unions, individuals in these unions may be able to benefit from some of the financial perks of marriage that, thus far, they have not been able to enjoy. One such benefit is the option to file joint tax returns, which often means a smaller tax bill.

Couples who would benefit tax wise from a change in filing status could then file an amended tax return claiming the marital status and thereby claiming the tax refund.      There is a limitation though:  the ability to amend the return is only allowed for the prior three tax years or two years since paying the tax.  As such, couples will forever lose their right to file amended returns for years outside the limitation while DOMA works its way through the judicial system.  

Therefore, same-sex couples should consult with their tax attorney to see if they may qualify to file a “Protective Claim for Refund.”  A Protective Claim for Refund may be advisable if your right to a tax refund is contingent on future events and may not be determinable until after the time period for filing a claim for refund expires.      However, this exception to the time limit on amending income tax returns does not provide a carte blanch allowance to file a claim and expect that your rights will be preserved.  As such, we recommend that couples seek the advice of a tax attorney to review the potential advantages and potential disadvantages of filing for a Protective Claim for Refund as there are many factors that should be considered before filing an amended tax return or Protective Claim for Refund with the Internal Revenue Service.     Further, a change in tax filing status may have tax benefits and, depending on your particular situation could result in tax ramifications.   Yet another reason to consult with a tax attorney today.        

Over the last 30 years, the tax attorneys and Certified Public Accountants at Moskowitz LLP, A Tax Law Firm, have successfully prepared thousands of current year and delinquent year income tax returns.  Our goal is to aggressively and legally limit the tax liability of our clients to the lowest amount legally permitted.   

Disclaimer:  Because of the generality of this blog post, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Prior results do not guarantee a similar outcome. Furthermore, in accordance with Treasury Regulation Circular 230, we inform you that any tax advice contained in this communication was not intended or written to be used, and cannot be used, for the purposes of (i) avoiding tax related penalties under the Internal Revenue Code, or (ii.) promoting, marketing, or recommending to another party any tax related matter addressed herein.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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