First Circuit strikes down Defense of Marriage Act but stays tax remedies

BY ALISTAIR M. NEVIUS

The First Circuit Court of Appeals declared part of the federal Defense of Marriage Act unconstitutional on Thursday, upholding a Massachusetts federal district court decision (Massachusetts v. United States Dep’t of Health and Human Servs., No. 10-2204 (1st Cir. 5/31/12), aff’g Gill v. Office of Personnel Management, 699 F. Supp. 2d 374 (D. Mass. 2010)). The appeals court held that the act’s denial of federal benefits to lawfully married same-sex couples violated the Equal Protection Clause of the U.S. Constitution.

At issue was Section 3 of the Defense of Marriage Act, P.L. 104-199 (DOMA), which defines “marriage” for purposes of federal law, as “only a legal union between one man and one woman as husband and wife.”

The First Circuit, like the lower court, focused on two aspects of DOMA: (1) that it prevents same-sex married couples from filing joint federal tax returns, thereby preventing them from benefiting from the lower tax burden available to most married couples who file jointly, and (2) that it prevents the surviving spouse of a same-sex marriage from collecting Social Security survivor benefits.

The plaintiffs in the several cases combined in the lower court were lawfully married same-sex couples. They had filed amended, joint returns and requested refunds based on their lower tax liabilities as joint filers.

The lower court found that Section 3 of DOMA was unconstitutional under the Equal Protection Clause. The court held that the government had no basis for denying benefits to same-sex married couples and that Congress had no legitimate interest in applying a uniform definition of marriage for purposes of determining federal rights, benefits, and privileges.

The district court ordered specific remedies for the plaintiffs’ tax claims (Gill v. Office of Personnel Management, amended judgment (8/17/10)). These remedies included ordering the payment of federal tax refunds, plus statutory interest under Sec. 6621, based on the tax owed on the plaintiffs’ amended joint returns. The court, however, stayed this relief, pending appeal.

The Justice Department originally defended DOMA in the suit, but later filed a revised brief arguing that the equal protection claim should be assessed under a standard of “intermediate scrutiny” used for gender discrimination cases and that DOMA failed under that standard. The First Circuit refused to extend intermediate scrutiny to this case, but nevertheless affirmed the lower court’s holding.

The circuit court noted that DOMA does not prevent same-sex marriage, where permitted by state law, but penalizes same-sex married couples by limiting their tax, Social Security, and other federal benefits. It said this burden was comparable to burdens the Supreme Court found to be substantial in earlier equal protection cases involving “historic patterns of disadvantage suffered by the group adversely affected by the statute” at issue in those cases.

The appeals court affirmed the district court’s holding, but continued the stay of the relief ordered, anticipating that the Supreme Court will eventually decide the issue.

Alistair M. Nevius ( anevius@aicpa.org ) is the JofA’s editor-in-chief, tax.

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