In response to the U.S. Supreme Court's decisions that the federal government must recognize and states must allow same-sex marriages (Windsor, 133 S. Ct. 2675 (2013); Obergefell v. Hodges, 135 S. Ct. 2584 (2015)), the IRS finalized proposed regulations issued in October 2015 under Sec. 7701 amending the definitions of "spouse" and "husband and wife" to reflect those decisions (T.D. 9785).
The final rules make a few changes from the rules proposed in REG-148998-13, in response to comments. Under the final regulations, for federal tax purposes, the terms "spouse," "husband," and "wife" are defined as an individual lawfully married to another individual. "Husband and wife" is defined as two individuals lawfully married to each other. These definitions apply regardless of the taxpayers' sexes.
The IRS did not adopt a suggestion that the regulations refer specifically to same-sex marriage, so that they would be gender-neutral. Another commenter suggested that IRS forms be updated to refer to "spouse" instead of "husband" and "wife." Because that was beyond the scope of the regulations, the IRS did not adopt the comment, but will incorporate it when updating forms and publications.
The proposed rules would also provide that a marriage of two individuals is recognized for federal tax purposes if the marriage would be recognized by any state, possession, or territory of the United States. According to the preamble to the proposed regulations, this means that whether a marriage would be recognized depends on whether it is recognized in at least one state, possession, or territory. The final regulations were amended in response to a comment to provide that the marriage is recognized for federal tax purposes if it is recognized in the state where the couple married. This change is intended to address concerns that treating a couple as married in any state would have unintended results, for example, by having common law rules apply to treat a couple as married.
Another clarification from the proposed rules is for foreign marriages. The preamble notes that a provision was added to the regulations stating that two individuals entering into a relationship denominated as a marriage under the laws of a foreign jurisdiction are married for federal tax purposes if the relationship would be recognized as a marriage under the laws of at least one state, possession, or territory of the United States. This rule is intended to simplify the determination of marital status for couples married outside the United States.
The rules make it clear that taxpayers who are not married but have entered into registered domestic partnerships, civil unions, or similar relationships will not be treated as married, which the IRS says will permit taxpayers who choose not to be married to have that choice respected for tax and other purposes (such as for Social Security benefits). The IRS has a lengthy discussion of this provision in the final regulations because a few commenters thought it should be changed, but the IRS did not agree.
The regulations obsoleted Rev. Rul. 2013-17 on Sept. 2, 2016, the day these final regulations were published in the Federal Register. However, taxpayers may continue to rely on guidance related to the application of Rev. Rul. 2013-17 to employee benefit plans and the benefits provided under such plans, including Notices 2013-61, 2014-37, 2014-19, 2014-1, and 2015-86 to the extent they are not modified, superseded, obsoleted, or clarified by subsequent guidance. Rev. Rul. 2013-17 was the IRS's original guidance recognizing same-sex marriages in the wake of the Windsor decision.