IRS Issues Final Regulations Defining Terms Related to Marital Status (T.D. 9785)

CCH Tax Day Report

The IRS has released final regulations that reflect the holdings of Obergefell v. Hodges, SCt, 2015-1 ustc ¶50,357, Windsor, SCt, 2013-2 ustc ¶50,400, and Rev. Rul. 2013-17, I.R.B. 2013-38, 201. The regulations define terms in the Code describing the marital status of taxpayers for federal tax purposes. As in the earlier proposed regulations (NPRM REG-148998-13), the final regulations provide that the terms “spouse,” “husband” and “wife” mean an individual lawfully married to another individual, and the term “husband and wife” means two individuals lawfully married to each other.

In addition, the final regulations provide that a marriage of two individuals will be recognized for federal tax purposes if that marriage would be recognized by the state, possession, or territory of the United States in which the marriage was entered into.

Comment: This reflects a change from the proposed regulations, which referred to any state, possession, or territory of the United States, rather than that in which the marriage was solemnized. The change avoids situations in which a couple would have to analyze the laws of all states, possessions, and territories to determine if any of those laws would fail to recognize their divorce, or would denominate an alternative legal arrangement (such as civil union) as a marriage.

The regulations clarify that the term “marriage” does not include registered domestic partnerships, civil unions, or other similar relationships recognized under state law that are not denominated as a marriage under that state’s law, and the terms “spouse,” “husband and wife,” “husband” and “wife” do not include individuals who have entered into such a relationship.

The final regulations provide that two individuals entering into a relationship denominated as marriage under the laws of a foreign jurisdiction are married for federal tax purposes if the relationship would be recognized as marriage under the laws of at least one state, possession, or territory of the United States. This rule allows couples who are married outside the United States to determine marital status for federal tax purposes, regardless of where they are domiciled and regardless of whether they ever reside in the United States.

The final regulations apply as of September 2, 2016. Rev. Rul. 2013-17, I.R.B. 2013-38, 201, is obsolete as of that date. However, taxpayers may rely on guidance related to the application of that ruling to employee benefit plans and the benefits provided under such plans, to the extent they are not modified, superseded, obsoleted, or clarified by subsequent guidance.

T.D. 9785, 2016FED ¶47,044

Other References:

Code Sec. 7701

CCH Reference – 2016FED ¶43,080B

CCH Reference – 2016FED ¶43,081D

CCH Reference – 2016FED ¶43,116

Tax Research Consultant

CCH Reference – TRC FILEIND: 3,202

CCH Reference – TRC HEALTH: 12,056.10

CCH Reference – TRC RETIRE: 42,162.15

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CCHTaxGroup

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