¶ … same-sex marriage refers to a legal married union between two persons of the same sex. In other word, same sex partner is a man legally married to another man or a woman legally married to another woman. Since same sex marriage is a new development in the United States, the federal government has faced challenges in treating the tax issues of same-sex individuals entering into marriage. The IRS's (Internal Revenue Service) ruling of 58-66 in 1958-1 C.B.60 determines the tax purpose for individuals who have entered into a common law marriage. Under the state law administered by the Federal income tax laws, the IRS acknowledges that it recognizes individual's marital status. Under IRS Ruling 58-66, the Service states that a couple will be treated as married based on the Federal income tax filing purpose, and the IRS has applied this Ruling 58-66 for over 50 years. (Internal Service Revenue, 2014).

"Article 1, Section 8 of the United States Constitution provides: "The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises ...; but all Duties, Imposts and Excises shall be uniform throughout the United States." (Trisha, 2013 p 269).

In 1909, the Congress passed the 16th Amendment that empowered the Congress to collect tax from different sources without a regard to enumeration or census. The revenue Act of 1913 imposed a tax on corporation and individual net income. Practitioners, when referring to tax law, have used the Tax Reform Act of 1986 or Internal Revenue Code of 1986. Under the Tax Reform Act 1986, a married couple can file tax jointly or separately. Married persons can also file separate or joint tax returns. In the United States, most married could file income tax jointly, however, there are case where married couple could file tax separately in case one of the couple does not agree. The married couples recognized by law are one man, one-woman partners legal married in the United States, and these married couples are entitled to file joint tax or tax returns. However, many same-sex couples also intended to file the same joint income tax o, which many states consequently denied. Moreover, many same-sex partners also intended to file the same tax returns that opposite-sex couples were enjoying. In reaction to this event, President Clinton signed the DOMA (Defense of Marriage Act) into law in 1996 ordered the federal government not to recognize the same-sex marriage. The law defines the concept spouse as a union between two individuals of opposite sex who is either husband or wife. The Section 3 of the DOMA defines legal marriage as a legal union between a man and a woman serving as husband and wife. Section 2(a) of the Act states:

"No state, territory, or possession of the U.S., or Indian tribe, shall be required to give effect to any public act, record, or judicial proceeding of any other State, territory, possession, or tribe respecting a relationship between persons of the same-sex that is treated as a marriage under the laws of such other State, territory, possession, or tribe, or a right or claim arising from such relationship." (Wald, 2013 p 273).

However, the DOMA has been under criticism in the last few years. First, President Obama has mandated the Justice Department to stop defending the Section 3 of the DOMA circuit. Following the public criticisms, the Senate Judiciary Committee repealed the DOMA in 2011. In 2013, the Internal Service Revenue ruled that same sex couples who are married in the United States would be treated as legally married for the federal tax purposes. (IRS, 2013). The ruling of the Act applies regardless of whether the couple resides in a jurisdiction or state that recognizes the same sex marriage or resides in states that do not recognize. The IRS starts implementing the tax aspect following the Supreme Court decision that invalidates a key provision of DOMA. The IRS maintains that same-sex couples will be treated and recognized as married for all federal income tax purposes. The ruling also applies to the estate and gift taxes for the same s-sex couples.

Objective of this paper is to investigate how the federal and state government handles the same sex marriage following the Supreme Court decision that invalidates the DOMA as unconstitutional.

Constitutionality of DOMA

On 26 June, 2013, the United States Supreme Court struck out the Section 3 of the DOMA on the ground that it violated the 5th Amendment of the U.S. constitution relating to the Equal protection clause "(United States v. Windsor, 133 S. Ct. 2675 (2013))." (Ahroni, 2014 et al. p...

§7. (Cornell University, 2015 p 5).
Before the Windsor case, the Federal government and many state governments did not permit same-sex couples to file joint tax returns. However, the government only allowed same-sex partners to file income tax or tax return as if they were single. Moreover, if the couples had a qualifying child, the DOMA only allowed one of the couples to claim the child, and dependency exemption benefits for the child. Additionally, home mortgage interest deduction and real estate tax benefits were allocated separately for same sex couples.

The issue that led to the Windsor case was that Thee Spyer and Edith Windsor were legally married in Canada in 2007. However, Spyer died in 2009 and willed her entire estate and belongings to Windsor. When Windsor intended to claim the estate tax exemption, the government debarred her from claiming the tax exemption for the surviving spouses based on the provisions of the Defense of Marriage Act. Under the federal statues, the DOMA did not include the same sex partner in the definition of spouse. Consequently, IRS refused to grant Windsor a tax exemption on the ground that she was not a surviving spouse. Although, Windsor paid the estate tax, however, she filed a suit challenging the constitutionality of Section 3 of DOMA. Following the hearing of the case, U.S. District Court as well as the Court of Appeal ruled that the Section 3 of the DOMA was unconstitutional. The Supreme Court also struck down the Section 3 of the DOMA because it was unconstitutional. Following the Supreme Court decision, many states in the United States and federal government have reviewed their income and estate tax laws in favor of same-sex couples. (U.S. Dept. Of Health & Human Services, 2013 Department of Labor (2014).

How Federal and States handle Taxes of Same-sex Couples Following the Supreme Court Decision

Following the Supreme Court ruling in favor of Windsor, the IRS has reviewed the tax purpose for the same sex couples using a "place of celebration approach" rather than a "place of domicile" approach to determine whether same -- sex couples are qualified for the federal tax benefits. "See Revenue Ruling 58-66 (1958-1 C.B. 60)." (Ahroni, 2014 et al. p 58). Using the "place of celebration approach" IRS will treat same-sex couples married as if they marry in a state that allows or recognizes the same sex marriage even if the state they are residing does not recognize the same-same marriage. Typically, the IRS maintains that the Service will recognize marriages of same-sex couples as valid even the couples domicile in foreign or domestic jurisdictions that do not recognize the validity of the same-sex marriage.

Before 26 June 2013, few states legalized the marriage of the same-sex individuals; however, following the Windsor's landmark case where the Supreme Court declared the DOMA as unconstitutional, several states legalize the same-sex marriage. At the end of 2013, Hawaii, New Jersey and New Mexico legalized the same sex marriage. In 2014, the same-sex marriage became legal in Pennsylvania, Oregon, and Wisconsin. Recent article published by Calhoun Law Group reveals that 30 states have legalized the same sex marriage in the United States. (Calhoun, 2015). The Arizona, California, Colorado, Connecticut and other 26 states in the United States have legalized the same sex marriage. However, Michigan, Arkansas and Mississippi do not recognize the same sex marriage. (Calhoun, 2015). Other states allow same sex married couples to file an income tax as if they were single. A single individual is an unmarried person filing tax return. However, Kansas, Georgia, Kentucky, Louisiana, Missouri, Ohio, North Dakota, and Nebraska do not allow the same -sex marriage, although, the states conform to federal tax law.

In Alabama, the tax issues for the same-sex couples are unclear. The constitution of Alabama banned the same-sex marriage in the state; however, the decision was struck down in 2015 in the case of Strawer v. Strange. Moreover, the Alabama decision to…