In the first of a pair of same-sex marriage rights cases decided today, the Supreme Court of the United States declared portions of DOMA (the so-called "Defense of Marriage Act") unconstitutional.  Although there were some concerns about jurisdiction in this case due to the executive branches failure to defend DOMA vigorously the court determined there was jurisdiction and that DOMA is unconstitutional under the equal liberty of persons protected by the Fifth Amendment. Known as the DOMA case, everything you need to know about United States v. Windsor  is summarized below: Prior to reaching SCOTUS here is what happened: Edith Windsor and Thea Spyer, two women, met in New York City in 1963 and began a long-term relationship. Windsor and Spyer registered as domestic partners when New York City gave that right to same-sex couples in 1993. In 2007, Edith Windsor and Thea Spyer, then residents of New York, were married in Ontorio Canada. Under the laws of the State o...

Issues 1 through 4 all focus on the tax liabilities created post-divorce. But what about tax liability incurred during the marriage? Issue #5. JOINT TAX LIABILITY: The Court has the power in a divorce case to assign both assets and liabilities, including tax liability incurred during the marriage. If there are joint tax returns filed during the marriage for which taxes are still owed, that liability is owed by both parties to the taxing authorities. The Court may assign that debt to one party by order or agreement, but that doesn't always satisfy the taxing authorities. Unless you file an innocent spouse application with the IRS (and the IRS makes an innocent spouse determination in your favor), they will still consider a joint debt owed by both parties until satisfied. A probate court order allows you to collect against your former spouse but does not prevent the IRS from collecting against you. Therefore, if there are any assets available for the payment of tax debt at t...

There are two certainties in life: Death and Taxes. We've already written about how divorce and estate planning are interrelated, but what about divorce and taxes? In all cases a divorce will affect some part of your tax return. In most cases there will be numerous changes in your income tax liability after your divorce and you should give consideration to what changes will take place because this could be a factor in determining the best divorce settlement for you. In some cases these changes may be complicated enough that your attorney should involve an accountant or certified financial planner to help analyze the different options. Our next five blog posts will explore the various issues raised by the interrelation of divorce and taxes so that you are at least aware of the issues to be on the lookout for. Issue #1. MARITAL STATUS: The most obvious way that a divorce will affect your taxes is by changing your marital status. This is a change to your federal income ta...

For the purposes of Federal and Massachusetts income tax returns you are required to file under the status of either "joint" or "married, filing separately" if you are married to your spouse on December 31st of the tax year in question. Therefore, if you are in the process of getting a divorce but were still legally married on December 31, 2010, then you must file under one of these two statuses for the year 2010. There is no specific law that requires you to file under the status of "joint" or "married filing separately", and typically this is your choice. A Judge can order parties to file jointly if there will be a benefit (such as a higher refund), but this is not typical. In each case the choice of how to file can be affected by different factors. For example, if you are concerned that your spouse is hiding income, then you definitely would not want to file a "joint" tax return because you could be liable for his/her hidden inco...