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Release: Oct. 28, 2002

UI law professor finds weakness in law banning gay marriage

An article written by a UI law professor says that the absence of fixed family definitions in the Internal Revenue Code should allow same-sex couples in Vermont who have children to take advantage of some of the same federal tax breaks given to married couples.

It also puts those couples in a position to challenge the constitutionality of the federal law barring recognition of same-sex marriages.

Patricia Cain, the Aliber Family Chair in Law at the UI College of Law, said that Vermont couples are in a unique position because the state allows civil unions similar to marriage between partners of the same sex. Writing in the Fall 2002 issue of the Capital University Law Review, Cain argues that since Vermont law recognizes same-sex civil unions, the partners in those unions could sue for discrimination if the IRS refuses to accept certain federal tax breaks.

Cain points out that the Defense of Marriage Act, passed by Congress in 1996, prohibits recognition of same-sex marriages, thus preventing same-sex couples from claiming tax breaks afforded to married couples. In most states, same-sex partners are considered merely domestic partners and are offered few legal protections. However, while the Vermont law allowing same-sex civil unions does not refer to the partners as spouses, it nevertheless treats their relationship as spousal in all legal respects.

“In Vermont, the state imposes legal responsibilities on married couples and, similarly, on couples who are parties to a civil union,” she wrote.

Cain also points out that the federal tax code does not define relationships between people, and instead relies on the legal definition of those relationships in the taxpayer’s state of residence. So, she asks, if couples in a civil union are treated as spouses under Vermont law, what is the justification for not treating them as spouses under federal tax law?

Cain doesn’t believe there is a rational justification. Instead she claims that the differential treatment accorded civil unions is more likely the result of bias or prejudice against same-sex couples. Since Vermont treats same-sex civil unions exactly like marriage for all purposes, she said the federal tax law should treat the parties as married, too. If the federal government claims that the Defense of Marriage Act (DOMA) prevents the IRS from treating such couples as spouses, then the couple has standing to claim that DOMA is unconstitutional. For DOMA to be constitutional under the equal protection clause there must be some justification for the exclusion of same-sex spouses other than bias or animus against lesbian and gay people.

“Such animus should not be sufficient to justify a statute,” she wrote. “Indeed, such animus…is also an insufficient justification for the Defense of Marriage Act.”

Cain said that same-sex partners with children are in position to receive the greatest tax benefit from a civil union because Vermont law considers the non-biological parent a stepparent. So while the partners are not allowed to file joint 1040s because they’re not married, the “stepparent” could take advantage of such tax breaks as child tax credits and head of household filing status. Domestic partners, Cain said, do not enjoy such tax benefits in states that do not allow civil unions.

Similarly, Cain said that if a same-sex civil union in Vermont breaks up, the former partners should not have to pay federal tax on property divided between them because the civil union law gives each partner an equal right in the other’s property. While property transferred between domestic partners may be subject to federal tax, Cain said the Vermont law means that such transfers between civil union partners should be treated as would property divided as the result of a divorce.

Cain ends her article with a call for action that ensures same-sex couples are treated equally when it comes to taxes, and possibly lead to the downfall of the Defense of Marriage Act.

“Although most civil rights litigators tend to shy away from tax law, Vermont's civil union statute gives public interest lawyers a unique opportunity to fight for the equal rights of committed same-sex couples,” she wrote. “There is no rational justification for such differential treatment in a world in which civil unions are otherwise treated the same as marriage. One could hope that a successful civil union challenge to the tax code would also encourage legislators and administrators to rethink the role of all families in the allocation of federal tax burdens.”