By Laurie A. Hunter, Esq.
On June 26, 2013, the U.S. Supreme Court, in a 5-4 decision, determined that the federal DOMA (Defense of Marriage Act) that prohibited recognition of a valid same-sex marriage under state law was unconstitutional. U.S. v. Windsor. In this case, the surviving spouse of a valid same-sex marriage filed a U.S. Estate Tax Return, claiming the marital deduction for assets passing to her. The marital deduction was denied by the IRS, and tax assessed. This decision makes clear that for a valid marriage under state law, the federal government cannot deny benefits to a spouse.
What this decision does not do: It did not address the validity of a state’s "DOMA" laws, which Colorado has passed, in which a state refuses to recognize the validity of a same-sex marriage that is valid under another state’s law. This may be the next case that reaches a court. It also does not address civil unions, that are specifically not marriage. In Colorado’s new Civil Union statute, a valid same-sex marriage in another state automatically converts to a civil union in Colorado. Therefore, it may be that couples married in a state where same-sex marriage is valid, would still not be entitled to spousal benefits in Colorado, but they could be entitled to federal spousal benefits. The effect is unclear at this point.
Thursday, June 27, 2013
Monday, June 3, 2013
501(c)(4)-Gate: Shocking IRS Scandal or Business as Usual?
By Merry Balson, Esq.
Over the last few weeks I’ve been glued to the media reports as the IRS scandal, dubbed by some "501(c)(4)-Gate", has unfolded. After all, it is not often that the Exempt Organizations division of the IRS makes national news once, much less multiple times in the same month, focusing so much of the nation’s attention on my line of work. If you’ve followed this story at all, you too might be as shocked as members of Congress were to learn that the IRS has targeted various categories of politically backed organizations applying for tax-exempt status. While I am certainly not condoning this kind of behavior, targeting of groups by the IRS, lengthy delays in processing applications, and seemingly unnecessary requests for information from new organizations seeking exemption is certainly not a new phenomenon. Over the last few decades the IRS has targeted gay and lesbian organizations, credit counseling organizations, housing assistance organizations, family-controlled organizations and anyone else the IRS may think either does not deserve the much coveted tax-exempt status or (in the IRS’ experience) is likely to abuse that status. Remember too that, like many other areas of government, the IRS budget has been cut time and again over the last decade or more. While more senior agents have retired, the IRS has either not filled the positions, or filled them with far less experienced personnel who have not had the luxury of their predecessor’s training. Complaints have mounted for years that the IRS is understaffed and undertrained, that processing times for 1023s and 1024s (the applications organizations file with the IRS to obtain tax-exempt status) have become unreasonably long (up to more than a year at this point for many organizations), and that IRS agents routinely ask for seemingly unnecessary and burdensome information in their follow-up requests to new organizations seeking tax-exempt status, but until now, no one in Washington seemed to notice or have any motivation to make any changes. The singling out of political organizations of any nature would absolutely be inappropriate, but to those of us familiar with the long standing problems with the IRS, if the investigations uncover that an internal practice like this existed, it would not be entirely surprising, and though deplorable, it would certainly not be "shocking" given the IRS’ history. We can only hope that whatever the outcome, this new attention to the IRS Tax-Exempt/Government Entities division will bring about some long needed changes that will benefit all tax-exempt organizations, and maybe too a serious review of whether granting tax exemption to any political organization is an appropriate and intended use of taxpayer funds.
Read more about the IRS’ history of burdening nonprofits in the New York Times article published on June 3, 2013 at New York Times.
Over the last few weeks I’ve been glued to the media reports as the IRS scandal, dubbed by some "501(c)(4)-Gate", has unfolded. After all, it is not often that the Exempt Organizations division of the IRS makes national news once, much less multiple times in the same month, focusing so much of the nation’s attention on my line of work. If you’ve followed this story at all, you too might be as shocked as members of Congress were to learn that the IRS has targeted various categories of politically backed organizations applying for tax-exempt status. While I am certainly not condoning this kind of behavior, targeting of groups by the IRS, lengthy delays in processing applications, and seemingly unnecessary requests for information from new organizations seeking exemption is certainly not a new phenomenon. Over the last few decades the IRS has targeted gay and lesbian organizations, credit counseling organizations, housing assistance organizations, family-controlled organizations and anyone else the IRS may think either does not deserve the much coveted tax-exempt status or (in the IRS’ experience) is likely to abuse that status. Remember too that, like many other areas of government, the IRS budget has been cut time and again over the last decade or more. While more senior agents have retired, the IRS has either not filled the positions, or filled them with far less experienced personnel who have not had the luxury of their predecessor’s training. Complaints have mounted for years that the IRS is understaffed and undertrained, that processing times for 1023s and 1024s (the applications organizations file with the IRS to obtain tax-exempt status) have become unreasonably long (up to more than a year at this point for many organizations), and that IRS agents routinely ask for seemingly unnecessary and burdensome information in their follow-up requests to new organizations seeking tax-exempt status, but until now, no one in Washington seemed to notice or have any motivation to make any changes. The singling out of political organizations of any nature would absolutely be inappropriate, but to those of us familiar with the long standing problems with the IRS, if the investigations uncover that an internal practice like this existed, it would not be entirely surprising, and though deplorable, it would certainly not be "shocking" given the IRS’ history. We can only hope that whatever the outcome, this new attention to the IRS Tax-Exempt/Government Entities division will bring about some long needed changes that will benefit all tax-exempt organizations, and maybe too a serious review of whether granting tax exemption to any political organization is an appropriate and intended use of taxpayer funds.
Read more about the IRS’ history of burdening nonprofits in the New York Times article published on June 3, 2013 at New York Times.
Kardashian Diaries Suit, Copyrights and Estate Planning
The recent news that the late Robert Kardashian’s widow, Ellen Pearson (a/k/a Ellen Kardashian), has been sued by the Kardashian children (and Mr. Kardashian’s former wife, Kris Jenner), for selling excerpts from their father’s diaries about their lives is a good reminder of the importance of good, clear estate planning documents. Reportedly, Ms. Pearson, who sold portions of the diaries to the tabloids, found the diaries in a box at a vacation home she shared with her late husband. The Kardashian children claim that Mr. Kardashian’s will left the bulk of his tangible and intangible personal property (which would include copyrighted items) to them, including the diaries, and that Ms. Pearson’s sale of them was, among other things, a copyright violation. Interestingly though, Mr. Kardashian’s will may have given both the vacation home and other personal property "customarily used at that property" to Ms. Pearson. The question is whether the property left to Ms. Pearson with the vacation home included the intangible personal property rights (such as copyright and publication rights) in the diaries. Though he probably had no idea his children would have such a public life following his death, had Mr. Kardashian given careful thought to how those diaries and any intangible property rights from photos and other personal effects should be disposed of in his will, and had drafted his plan to clearly reflect that intent, this dispute might have well been avoided. A court has not yet ruled but for estate planners and their clients, the lesson is to plan for all eventualities - who knows, your own kids may turn out to be reality TV stars well after your death and your own notes and photos might be for sale to the highest bidder.
Subscribe to:
Posts (Atom)