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Windsor Decision Leads to Two Big Federal Policy Shifts This Week

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By William Peacock, Esq. on August 30, 2013 3:52 PM

When the Windsor decision was announced two months ago, we knew that the country was headed for a season of rapid change. Indeed, in the days after the decision, the Obama administration pushed the government to carry out the decision quickly and smoothly, and while progress is being made by a multitude of federal agencies affected by the decision, the process has been, and will be, far from smooth.

From conflicting federal and state tax laws, to differing interpretations of the opinion, and reluctant agencies that attempt to persist with the "man and woman" only definition, the process is far more complicated than simply declaring "equality." This week, however, two big steps were taken in the areas of taxation and veterans' benefits.

Equal Tax Treatment and Penalties

Equality may have some drawbacks, it seems.

The IRS announced guidelines this week for federal tax treatment of legally-recognized same-sex marriages. Those who have a marriage recognized by the place of celebration (i.e., married in New York) will maintain the benefits and burdens of marriage for federal tax purposes no matter where they reside, reports The New York Times. Couples will have to file federally as "married filing jointly" or "married filing separately" and will face the same marriage penalty as heterosexual couples.

Same-sex married couples will also have the option of filing amended tax returns for the past few years, but will not be required to do so, especially if doing so would subject them to additional penalties.

The IRS announcement greatly simplifies the federal tax treatment by ensuring a national standard, no matter where a couple might move to. However, there is a great possibility for conflict with state laws, as many states, including some that do not recognize same-sex marriages, base their tax filing on the federal returns.

Veterans Administration Benefits for Same-Sex Marriages

A federal judge, earlier this week, ordered the Veteran's Administration to extend the same benefits to same-sex married couples as are provided for heterosexual married couples.

According to MSNBC, VA Secretary Eric Shinseki had earlier argued, in a letter to Sen. Jeanne Shaheen, a member of the Armed Services Committee, that the VA's separate statutory definition still defined a spouse as "a person of the opposite sex," and since the statute hadn't been directly challenged, the VA would continue to abide by it.

U.S. District Judge Consuelo Marshall, of Los Angeles, relying upon United States v. Windsor, found the statute to be unconstitutional under a rational basis level of scrutiny. "The denial of benefits to spouses in same-sex marriages is not rationally related to any of these military purposes," she wrote.

The case was brought by Tracey Cooper-Harris, an Iraq war veteran who suffers from multiple sclerosis, and receives VA benefits, yet was awarded less per month than a similarly-situated person in a heterosexual marriage would be. She married her wife, Maggie Cooper-Harris, in 2008.

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