Gays Denied Married Tax Status

Attorney Gen. Eliot Spitzer won’t intervene in state finance department decision

The New York State Department of Taxation and Finance is invoking the federal Defense of Marriage Act to stop legally wed same-sex couples in New York from filing as married.

The office of state Attorney Gen. Eliot Spitzer, which issued an opinion last year that New York should honor the marriages of such couples wed in Canada and elsewhere, has refused to get involved in this controversy, a stance one legal advocate called “a dodge.”

Tom Bergin, spokesman for the tax department, said, “For purposes of filing in New York, we recognize the Defense of Marriage Act because that is what the IRS does. We follow federal guidelines.”

New York State law requires taxpayers to use the same filing status on their state returns that they use on their federal forms. In Massachusetts, where same-sex marriage is legal, same-sex married couples are required to file as married, filing either jointly or separately, while filing as single with the Internal Revenue Service. They are also required to figure their state tax by calculating what they would have paid Uncle Sam were they allowed to file as married.

State Comptroller Alan Hevesi used Spitzer’s opinion last year in ruling that the state pension fund, for which he is the sole trustee, will recognize legally married same-sex spouses.

Juanita Scarlett, press secretary for Spitzer, said, “We don’t have anything to do with the state tax department.” She added, “In terms of taxation, we enforce the laws on the books.” She repeatedly said that any comment on tax law relating to gay married people would have to come from the tax department.

James Esseks, litigation director for the Lesbian and Gay Rights Project of the American Civil Liberties Union, said that the tax department was “not following the attorney general’s opinion” last year that these marriages should be honored by the state, and that Spitzer’s refusal to comment on the department’s decision not to recognize his finding was “a dodge.” Esseks acknowledged, however, that Spitzer’s opinion “is not binding on anybody.”

Alphonso David, a staff attorney with Lambda Legal Defense who heads a working group on gay tax issues, said, “New York has a well-established rule that a marriage validly entered into in another jurisdiction must be respected as valid in New York, even if the two parties could not have married in New York under the Domestic Relations Law.” He noted many insurers and towns in New York that are already recognizing legal same-sex marriages.

“Out-of-state same-sex marriages of New York same-sex couples have already been respected here in New York for purposes of employment, insurance, public accommodations and pension benefits,” David said. “For the state to now say that all these couples are married for these purposes but not for state tax purposes is not only unfair but blatantly hypocritical.”

Lambda is working on reversing the tax department’s decision.

David said that he did not know if Spitzer could compel the tax department to recognize gay married couples, but said, “He has to defend them if they are sued.”

Gay City News contacted many of the people aspiring to replace Spitzer as attorney general when he runs for governor next year to ask if they viewed the legal situation differently. Charlie King, who previously mounted a run for lieutenant governor, was the most willing among the candidates to stake out a position, saying, “I support Spitzer’s position that same-sex marriages from outside the state should be honored by New York,” adding that this should hold true for the tax department as much as any other entity. King acknowledged, however, that the attorney general would have to defend the tax department if sued, “unless it is clearly unconstitutional—and I haven’t come down on where I would draw the line.”

Sean Maloney, a former White House aide and out gay man who is running, said he would “need to look at Spitzer’s power to correct the tax department’s stance,” which he called “at odds with what the attorney general has said is existing law.”

Former Public Advocate and TV commentator Mark Green responded with a “no comment” through a spokesperson. Calls were not returned from Andrew Cuomo, who headed up the department of Housing and Urban Development under former Pres. Bill Clinton, Assemblymen Richard Brodsky of Westchester and Michael Gianaris of Queens, and State Sen. Michael Balboni, the lone Republican, of Nassau.

State Sen. Tom Duane (D-Manhattan) noted that he had hearings on same-sex marriage last year “and we found that New York State should already be recognizing them, so it is particularly egregious that they are not recognizing them from other jurisdictions.” He said he disagreed with the part of Spitzer’s 2004 opinion that said New York law did not yet allow it to issue marriage licenses to gay couples and insisted that the attorney general “absolutely should get involved” in this issue with the tax department.

Duane has introduced a Right to Marry Bill in the Senate to “clean up” state law in this area, but said it is not needed unless the courts rule that the Domestic Relations Law or the state Constitution does not already allow for same-sex marriage as legal advocates are asserting in several court cases.

Assemblywoman Deborah Glick (D-Manhattan) said, “The Pataki administration is disinterested to hostile to making accommodations in this area” so that a legislative remedy would be “difficult” to achieve.

Republican Gov. George Pataki’s office did not return a call for comment.

Where does all this leave the legally married same-sex couple in New York?

Gay activist Brendan Fay, who married Tom Moulton in 2003 in Canada, said they filed jointly as a married couple with New York last year.

“We went by the attorney general’s statement about recognizing our equal Canadian marriage,” he said, urging Spitzer to clarify the issue for all the married gay couples here.

Mark Munroe, an accountant who advises many gay couples said he does not advise a joint return at this point.

“If someone feels strongly and I get a release from them from liability,” he said, he will list their filing status as married, but it will entail an additional fee to calculate what their federal tax would have been were they allowed to file as married there. He also warned that unless state law changes, “the state is not going to accept it” and may not discover the discrepancy between the federal and state filing status for years, at which point significant penalties and interest could be assessed.

By filing an affidavit about the marriage and a copy of the license, he said, penalties—but not interest—might be avoided because of evidence that the filers acted in good faith.

Alan Van Capelle, executive director of the Empire State Pride Agenda, said, “I think we’re entering the period of uncertainty for gay and lesbian people regarding what they’re entitled to in New York State and the tax issue is just one issue that gay and lesbian families will contend with. Much of this will be worked out through litigation. We want to work, as we have behind the scenes, to educate elected officials and policy makers to move them to places where they can be helpful to the community. This is uncharted terrain for everyone.”