Defense of Marriage Act (DOMA) Supreme Court Ruling

In one of its most highly anticipated decisions, the Supreme Court by a margin of 5 to 4 has struck down section 3 of the Defense of Marriage Act (DOMA), which required same-sex spouses to be treated as unmarried for purposes of federal law, as an unconstitutional deprivation of equal protection.

Although DOMA is not primarily viewed as a tax law, it carries significant tax consequences for same-sex couples, as it did in this case which was originally brought by the surviving same-sex spouse after IRS denied a marital deduction to the estate of the deceased spouse for the amount left to the surviving spouse. The Supreme Court’s decision affirmed the Second Circuit in allowing an estate tax marital deduction to the deceased spouse’s estate and will have far-reaching tax implications for married same-sex couples.

In ’96, Congress enacted, and President Clinton signed into law, DOMA. Section 3 of DOMA defines marriage for purposes of administering federal law as the “legal union between one man and one woman as husband and wife.” It further defines “spouse” as “a person of the opposite sex who is a husband or wife.”

DOMA was, in large part, a reaction to the possibility that states would begin to legally recognize same-sex marriage. The House Judiciary Committee’s Report on DOMA noted that state-sanctioned same-sex marriages could make same-sex couples eligible for a whole range of federal rights and benefits.

Facts of the Case.

In ’63, Edie Windsor met Thea Spyer in New York City. Shortly thereafter, they entered into a committed relationship and lived together in New York. In ’93, they registered as domestic partners in New York City, and in 2007, they got married in Canada.

Spyer died in February 2009, leaving her estate to Windsor. Because of DOMA, the estate did not qualify for the unlimited marital deduction for the amount left to Windsor. As a result, Spyer’s estate had to pay $363,053 in federal estate tax. Windsor paid this amount in her capacity as executor of the estate, then sued for a refund and declaration that DOMA §3 violates the Equal Protection Clause of the Fifth Amendment. The district court allowed the Bipartisan Legal Advisory Group (BLAG) of the House of Representatives to intervene and defend DOMA.

Lower court decisions.

The district court, applying the rational basis standard, held on summary judgment that DOMA §3 was unconstitutional and that Windsor was accordingly entitled to a refund. On appeal, in a 2-1 opinion, the Second Circuit affirmed. The Court determined that homosexuals constitute a quasi-suspect class, applied an intermediate “heightened” level of scrutiny in reviewing DOMA §3, and found that the asserted justifications for DOMA failed.

Supreme Court affirms.

In a majority opinion delivered by Justice Kennedy (joined by Justices Ginsberg, Breyer, Sotomayor, and Kagan), the Supreme Court held that DOMA §3 was an unconstitutional deprivation of equal protection.

However, §2 of DOMA, which allows states to refuse to recognize same-sex marriages performed under the laws of other states, wasn’t challenged in this case.

After determining that it had jurisdiction to hear the case, the Court traced the history of same-sex marriage in New York, noting that over time, its exclusion had come to be seen as unjust. Thus, New York engaged in a statewide deliberative process and ultimately changed its laws to first recognize same-sex marriages performed elsewhere, like that of Windsor and Spyer, and then to permit same-sex marriage. This evolution was consistent with the longstanding tradition that the regulation of marriage is within the authority and realm of the separate states, and the federal government has generally deferred to state-law policy decisions with respect to domestic relations. The Court acknowledged that there were some distinct examples of where federal law regulates marriage in order to further federal policy, but stated that DOMA has a far greater reach—it affects the application of over 1,000 federal statutes and countless regulations. Thus, by seeking to injure the very class New York sought to protect, the Court found that DOMA violated basic due process and equal protection principles.

In addition, rather than promoting consistency, the Court found that DOMA in fact treated married couples within the same state differently. Further, the effect of DOMA was to impose restrictions, stigma, and disabilities onto a state-defined class, and the House Report expressly concluded that DOMA expressed a moral disapproval of homosexuality. This, the Court found, was a discrimination of an “unusual character” warranting “careful consideration.”

The equal protection issues implicated by DOMA were plain to the Court, which noted that New York’s marriage laws sought to eliminate inequality, whereas “DOMA writes inequality into the entire United States Code.” It makes unequal a subset of state-sanctioned marriages in areas ranging from taxes to Social Security and veterans’ benefits. Accordingly, the majority struck down DOMA as invalid, but stated that its opinion and holding are confined to “lawful marriages.”

It is unclear what effect, if any, the Court’s opinion will have in states that have domestic partnerships or civil unions. The Court’s “lawful marriages” language may prove detrimental to those who claim that these arrangements are essentially equal to marriage.


There were dissents filed by Chief Justice Roberts, Justice Scalia (joined by Justice Thomas and joined in part by Chief Justice Roberts), and Justice Alito (joined in part by Justice Thomas).

The Chief Justice’s dissent opined that the Court lacked jurisdiction to review the lower courts’ decisions and that Congress acted constitutionally in passing DOMA, finding that defining marriage on a federal level was justified by interests in uniformity and stability. His dissent primarily noted that the Court’s opinion didn’t decide whether states may in fact “continue to utilize the traditional definition of marriage”—in other words, whether there exists a constitutional right for same-sex couples to wed. He stated that this issue was not properly before, and thus not decided by, the Court.

Justice Scalia’s dissent stated that the Court lacked the authority to decide the Windsor case since Windsor and the government were both happy with the decisions of the district court and Second Circuit. He said that the Court’s role isn’t to determine the compatibility of state or federal laws with the Constitution except when such is necessary to the resolution of a dispute before it.

Justice Alito readily concluded that the Constitution doesn’t guarantee the right to same-sex marriage, and thus DOMA isn’t unconstitutional. He framed Windsor as seeking not the protection of an established right, but the recognition of a new one—which, according to Justice Alito, isn’t the province of unelected judges.

Effect on tax law administration.

The following are among the tax breaks newly available to legally married same-sex couples:

  • the right to file a joint return, which can produce a lower combined tax than the total tax paid by the same-sex spouses filing as single persons (but this can also produce a higher tax, especially if both spouses are relatively high earners);
  • the opportunity to get tax-free employer health coverage for the same-sex spouse;
  • the opportunity for either spouse to utilize the marital deduction to transfer unlimited amounts during life to the other spouse, free of gift tax;
  • the opportunity for the estate of the first spouse to die to get a marital deduction for amounts transferred to the surviving spouse;
  • the opportunity for the estate of the first spouse to die to transfer the deceased spouse’s unused exclusion amount to the surviving spouse;
  • the opportunity to consent to make “split” gifts (i.e., gifts to others treated as if made one-half by each); and
  • the opportunity for a surviving spouse to stretch out distributions from a qualified retirement plan or IRA after the death of the first spouse under more favorable rules than apply for nonspousal beneficiaries.

Many other tax provisions are affected by a taxpayer’s marriage status, such as the deductibility of alimony paid to a spouse or former spouse and the availability of the innocent spouse protections.

Planning tips.

Married same-sex couples who filed separate federal returns due to DOMA should consider filing amended returns with claims for refund, where applicable. In addition, although it’s unclear what the impact of the opinion will be on same-sex couples in state-sanctioned domestic partnerships or civil unions, it may well be worth filing protective refund claims in the event that the issue is favorably resolved, via litigation or otherwise.

Presumably, IRS will issue procedures to facilitate these claims.

Married same-sex couples should also amend their estate plans to take advantage of many of the favorable provisions listed above. As illustrated by the Windsor case, these provisions can yield significant tax savings.

If you have any questions regarding the tax implication of this DOMA decision, please do not hesitate to contact us.


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