Recently, in Windsor v. U.S., the Supreme Court made history by striking down a key provision in the Defense of Marriage Act (DOMA). Although DOMA wasn’t typically viewed as a tax law, it carried significant tax consequences for married same-sex couples who have traditionally been unable to do things like file a joint return or take advantage of a number of favorable estate-planning provisions. The Supreme Court’s decision means that the federal government, including the IRS, must now treat same-sex couples who are legally married in states that permit same-sex marriage the same as their heterosexual counterparts. However, the Court’s decision also raises a number of unanswered questions, including whether and to what extent it will apply retroactively, and how conflicts between state laws will be resolved.
in 1996, Congress enacted, and President Clinton signed into law the Defense of Marriage Act. Section 3 of DOMA defines marriage for purposes of administering federal law as the “legal union between one man and one woman as husband and wife.” It further defines “spouse” as “a person of the opposite sex who is a husband or wife.”
The Windsor Case based on the taxation of an estate of a same-sex couple from New York challenged Section 3 and prevailed in the district court and again in the Second Court of Appeals. In a majority opinion delivered by Supreme Court Justice Kennedy, the Supreme Court held that DOMA Section 3 was unconstitutional deprivation of equal protection. It should be noted that Section 2 of DOMA, allowing states to refuse to recognize same-sex marriages performed under the laws of other states, wasn’t at issue in this case.
Although there was difficulty and confusion in applying tax law for same-sex couples prior to this decision, it has not eased the complexity encountered in reporting and complying with federal and state tax laws with regard to same-sex couples. While the decision makes clear that the federal government must recognize a lawful same-sex marriage, a number of issues remain unanswered including the following:
As with almost all new complex tax law, these new provisions bring about a great deal of confusion and uncertainty as to application. I am sure that as these new provisions come into practice, many cloudy issues will be resolved. I am also sure that just as many new issues will arise. Stay tuned…I will keep you posted.
At the request of Senators Carl Levin (D-Michigan) and Tom Coburn (R-Oklahoma), the Government Accounting Office (GAO) recently conducted a study of the actual tax rates paid by companies that had $10 million or more in assets, a recent article from The Hill has reported.
The subsequent report revealed that in 2010 these large, profitable corporations paid an effective federal tax rate of 12.6% in spite of the fact that the statutory rate was 35%. Even when adding in local, state and foreign taxes, the rate paid climbs to only 17%.
How can that be, you ask. The answers lie buried in the Internal Revenue Code, which happens to be about 10 times the size of the Bible. Therein, savvy tax professionals find plenty of exemptions, deferrals, tax credits and other incentives which enable large corporations to dramatically reduce the actual taxes they must pay to Uncle Sam. Of course, the tax burden thus avoided gets shifted onto hardworking families and small businesses, many of whom at that point are paying a higher effective rate than the big boys.
According to Coburn, “giveaways and loopholes” bolster the case for comprehensive tax reform. I, for one, am skeptical whether any meaningful reform will ever see the light of day, but one never knows.
In a few days, Reno will host the 2013 Triple-A All-Star Week at the Reno Aces stadium. This is an opportunity you won’t want to miss. Triple-A teams from across the country bid to host this event, and the Reno Aces Baseball Club was the one chosen. Hundreds of former Triple-A All-Stars have gone on to the Major League, and many have even played their way to the Major League All-Star Game.
Triple-A All-Star week will begin with the All-Star FanFest held on Saturday, July 13 and Sunday, July 14. Fans will have the chance to test their batting and base-running skills, get autographs from MLB alumni, JT Snow, Robb Nen, and Jack Clark, and much more.
The 2013 IGT Triple-A Home Run Derby will be held on Monday, July 15, and is set to begin at 7:05, but the entertainment will start at 6. The Home Run Derby will showcase six of the top hitters in Minor League Baseball, and one top hitter from a local high school. Prices range from $10-$30.
The 2013 Dolan Auto Group Triple-A All-Star Game will be held Wednesday, July 17 at 6:05 p.m. The best players from the Pacific Coast League and International League will compete for the win. The Pacific Coast team will be managed by Brett Butler, the Reno Aces manager, and will include three Reno Aces players. Prices range from $12-$36.
Not only are these great events to attend, it is also a great benefit to our local economy. According to the RGJ’s article, “Betting on Reno: All-Star game’s economic impact will be measured by national exposure”, the event is estimated to bring in approximately $1 million from traveling baseball executives and staff members. This amount does not include family, friends, and fans travelling to see the event. The 2014 host of the event, Durham, N.C, expects to receive an estimated $3.3 million in visitor spending. This event will be nationally televised on the MLB Network and will be great exposure for Reno and all of Northern Nevada. The MLB Network broadcasts to millions of households, and will allow Reno to not only showcase the Reno Aces, but also show all that Northern Nevada has to offer.
Tickets are still available for all of these events, so don’t miss your chance to support our community and see these major league prospects in action!
I ran across an article – Why Smart Bosses Treat Their Employees Like Dogs – comparing dog obedience training to the way that business owners should treat their employees and I found it very intriguing. I spend considerable time training my German Shepherds and they are too big not to have manners! I hadn’t thought about it before but there are many valuable lessons that can be learned from dog training. Here are a few of them: