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Discussion:DOMA and Amended Returns

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Discussion Forum Index --> Advanced Tax Questions --> DOMA and Amended Returns


Discussion Forum Index --> Tax Questions --> DOMA and Amended Returns

JCCPA (talk|edits) said:

11 January 2014
Hi All:

I am working on filing some amended returns for a married same sex couple.

We are going back to the 2010 tax year.

I've been researching this forum and found these threads:

http://www.taxalmanac.org/index.php/Discussion:DOMA_and_same_sex_marriage_amendments

http://www.taxalmanac.org/index.php/Discussion:Beat_the_dead_DOMA_horse

It appears that there is no guidance on amending returns and filing a new return based on my review of those threads and other research I've done.

I am considering doing the following:

1. Amend both individual 1040's showing "0" on each Form 1040X.

2. Do a new Form 1040 with married filing joint (I guess this wouldn't be an "amendment" and therefore an original return).

3. Send a cover letter explaining my procedure as well as putting statements in with the 1040X's (as it asks you the reason why you are amending anyway).

Has anyone else already done amended returns in this situation?

Any ideas from anyone?

I might also go to my local IRS office next week to discuss with them. I am sure they won't have an answer, however.

Thanks in advance for any guidance.

Kevinh5 (talk|edits) said:

11 January 2014
That's not what I'd do.

I'd amend one return to zeros, and the other to MFJ.

Tkelly911 (talk|edits) said:

12 January 2014
Kevin, wouldn't two returns cause confusion in account services? The 1040X changes the filing status of both parties to a joint return. From two returns to one return as would be appropriate. I have filed five of these under DOMA for California residents and all have been accepted, as evidenced by the account statements in E-Services.

EADave (talk|edits) said:

12 January 2014
I agree with both Kevin and Tkelly as to the approach. That is why I will be filing 3 amended returns. Only kidding, there are no specific procedures for changing to a MFJ return other than what is listed on page 6 of the 1040X instructions. It merely says to combine the spouse's income/deductions/credits to the taxpayer's amended return. It never specifically states to amend one spouse's return to zeros; that may be overkill.

What I plan to do is to follow the instructions, add the income/deductions etc from the spouse's return, and then include a copy of the spouse's original tax return with the amended return for reference. At least the IRS will have the numbers in front of them when processing the amended return. I will also make mention of the DOMA RR 2013-17, maybe even attach a copy of the verbiage in case the IRS employee has been sleeping under a rock.

Ckenefick (talk|edits) said:

12 January 2014
Methinks this procedure should be no different than for heterosexual, legally married couples...Page 6 of the 1040X instructions. One 1040X filing.

EADave (talk|edits) said:

12 January 2014
Hey, that was my answer! Leggo my Eggo!!! And get some sleep, you are 1 hour ahead of me!! Go 49ers!

Ckenefick (talk|edits) said:

12 January 2014
I think you mean, "Go Panthers...."

Regicide9 (talk|edits) said:

12 January 2014
The process is no different than a heterosexual couple.

Amend one return to Mfj. You do not have to do anything else with the other return. Don't forget to ask your clients if one of them had imputed income due to health insurance covering a Domestic partner. Also, if that is the case, contact that employer to get back ss and Medicare withholdings on the imputed income, FYI...I amended for one of my clients per the new Doma rules back in October. My client called irs to check up a couple weeks ago and was told by The phone agent that returns being amended for Doma reasons were being collected and put on the back burner, whatever that means.

Regicide9 (talk|edits) said:

12 January 2014
Stupid auto correct. Roma should be doma.(Done)

JCCPA (talk|edits) said:

12 January 2014
Thank you everyone for the commentary....it's much appreciated :)

I will be doing what Kevin pointed out. Amend one return to "zeros" and amend the other return to "Married Filing Jointly."

JC

Ckenefick (talk|edits) said:

12 January 2014
Pretty much everyone here says not to do that.

Did you read the 1040X instructions or not?

EADave (talk|edits) said:

12 January 2014
It's just that Kevin wields this Jedi mind control trick. You really can't blame him for falling for this, but just remember, "Adventure. Excitement. A Jedi craves not these things.”

Norman-tx (talk|edits) said:

13 January 2014
Several months ago I amended 2010 & 2011 tax returns for a same sex couple from Single to MFJ. Before I amended the returns, I called the IRS practitioner hotline and asked if there was any specific guidance for amending the returns. Although no written guidance, I was told to amend only one of the taxpayers’ returns and let the IRS zero out the other. Also, attach a copy of the marriage certificate.

In the explanations section of 1040X, I said: 1) Amending to change filing status from Single to MFJ. 2) Same-sex couple legally married in … on ... .A copy of the marriage certificate is attached. 3) Tax return of spouse should be zeroed out by IRS.

Clients received their refunds after about 10 weeks.

JCCPA (talk|edits) said:

13 January 2014
Thanks everyone - Ckenefick - I assumed all the other posts were affirming what Kevin had said. Yea, I fell for the Jedi Mind Trick LOL. I have this under control and I appreciate all the meaningful dialogue.

Ckenefick (talk|edits) said:

13 January 2014
How many of each kind of animal did Moses bring on his ark?

EADave (talk|edits) said:

13 January 2014
Tricky question but I'll have a stab at it.

The clean beasts and birds entered the ark “by sevens”, Genesis 7, 2-3, while the unclean animals went into the ark by "twos", Genesis 6:19

Right off the top of my head, I thought 2 of every kind but now I have learned something new today! Now if you are asking how many total animals entered the ark, probably only about a handful of people know the answer to that question.

As for the IRS guidance to amend to zeros, that is curious indeed. And to also attach a copy of the certificate; that is interesting too. You would think the IRS would release official guidance; but hey, who needs that right?

Ckenefick (talk|edits) said:

13 January 2014
I do believe it was *Noah* - not Moses - who had the ark, right?

If so, this is not only a tricky question, but a *trick* question...

EADave (talk|edits) said:

13 January 2014
Hilarious!!! And I still am learning. Good one!!

Death&Taxes (talk|edits) said:

13 January 2014
His name was Noah Moses, Moses being the surname.

Snowbird (talk|edits) said:

13 January 2014
D&T ... you must be thinking of Amos Moses ... "Named him after a man of the cloth,Called him Amos Moses." Jerry Reed

Ckenefick (talk|edits) said:

14 January 2014
When my kids tell me, "You shouldn't say 'hell,' it is a bad word."

I respond, "Hell cannot be a bad word if it is the *good* book." (Now go to your *damn* room...)

Thank you, thank you very much...

Lalva (talk|edits) said:

14 January 2014
One new client came today so I can review the past years tax returns. Same-sex couple married in CA.

Long story short: they filed incorrect returns (single, but no income splitting when they could have done so, standard deduction when they could have itemized...) After working on the amended to file MFS or MFJ return, they would have to pay taxes because of their high combined income (and AMT). It doesn't make sense to file the amended return.

I am wondering if I can just amend to correct the standard versus itemized deduction and leave everything else alone. In this case they both would get refunds. I ask because they are not required to amend to change their status, so we amend to correct a return. Do you see a problem here?

Ckenefick (talk|edits) said:

14 January 2014
because they are not required to amend to change their status

If that is the rule, as put forth by the taxing authority, I see no problem with your approach.

Lalva (talk|edits) said:

30 January 2014
Ckenefick, thanks, that's exactly what the instructions of the 1040X say.

I would like to amend their returns to enter the itemized deductions and leave everything else alone. My concern is that they didn't split the community property income in their originally filed 1040s. In 2010 the IRS released the CCA saying that in community property states, like California, RDPs had to split their community income.

Do you guys see any problem with just deducting the itemized deductions and not splitting their income? Or am I looking for trouble? We are not interested in changing the filing status for that year.

Thanks

HowardS (talk|edits) said:

5 February 2014
Bumping this. I'm about to file my first same sex couple amended returns and question the requirement to include a copy of the marriage license. Heterosexual couples don't have to do this, isn't this a bit discriminatory? Has anybody excluded the license successfully?

Lalva (talk|edits) said:

6 February 2014
The truth is that I have never sent proof of RDPs or marriage license when amending same-sex returns, but it won't hurt and it may speed up the process. I am planning on doing it.

Joanmcq (talk|edits) said:

7 February 2014
I've gotten two requests so far for marriage licenses after amending. One auditor said yes, we would ask for the marriage license of a hetero couple too. But I've never amended het couples to joint, so I can't verify this. But I think it's discriminatory. The couples just said, hell, I'll send it to get this over & done with.

Ckenefick (talk|edits) said:

7 February 2014
It's really assnine, isn't it?

Cricktaxea (talk|edits) said:

8 February 2014
After working on the amended to file MFS or MFJ return, they would have to pay taxes because of their high combined income (and AMT). It doesn't make sense to file the amended return.

I am wondering if I can just amend to correct the standard versus itemized deduction and leave everything else alone. In this case they both would get refunds. I ask because they are not required to amend to change their status, so we amend to correct a return. Do you see a problem here?

Interesting scenario. While it's true they don't have a requirement to amend if you amend just for the itemization then you have willfully prepared a materially incorrect tax return. Considering the fact that not changing the filing status along with the itemization causes extra tax to not be paid, this sort of sounds like having your cake and eating it too.

You want to not change the status because there's no requirement to do so but then file a 1040X to take advantage of one area of the return while ignoring another area. When you file an amended return you're supposed to check the whole thing not just the area you want to amend, and make whatever material corrections as appropriate.

My personal opinion is a judge would say yes they can simply sit on the return and not do anything but if they want to amend for a refund then the whole return has to be corrected including the filing status.

Bob

Ckenefick (talk|edits) said:

8 February 2014
Excellent points. If the tables were flipped, and if a taxpayer filed an amended return with positive and negative adjustments, IRS would not be able to pick and choose which ones it wanted to process. That's Issue #4 herein:

http://www.irs.gov/pub/irs-wd/1052003.pdf

It reminds me a bit of a case, that is still ongoing actually, wherein we have put client's asshole ex-spouse in a very, very untenable position. And, the only way for ex to get all the money that is sitting as a credit in "his" account with the IRS, he will have to file a fraudulent return. If he files a truthful return, the $X that he would otherwise get will be adjusted downwards and will become a small fraction of $X. Ex's tax return preparer is likewise in a real big bind, and is likewise an asshole. We have already caught the preparer in a few big lies, big enough he would probably have his CPA certificate revoked, which is something to consider...or to maybe use as a *bargaining* chip...

Joanmcq (talk|edits) said:

9 February 2014
Oddly enough, guidance says you can amend to fix an issue that has nothing to do with filing status and not amend filing status. However, if you amend for any of the changes due to DOMA being overruled, such as removing the imputed income from spousal medical insurance, you then must make all of the changes that are affected by DOMA: filing status, IRA contributions, etc. you can't pick & choose once you decided to recognize the marriage on the tax return.

Lalva (talk|edits) said:

9 February 2014
Cricktaxea, that was my concern, and after thinking about it I am not going to amend that year, I don't want to open a can or worms. My clients messed up and it would be too messy to amend. Too bad.

However I would have amended had they split their income properly. As Joanmcq says there is no problem amending the return for other reasons without changing the filing status because they are not required to do so.

Cricktaxea (talk|edits) said:

10 February 2014
I took an online seminar a couple months ago on DOMA. The main thing about it is these couples now have to follow the same rules as every other married couple. On the one hand many of them really want to be married for obvious reasons and I personally agree but on the other hand the ones with substantial assets or income are used to splitting things up and figuring out the best way to save tax. Most of that is gone now and many of them don't realize it. Now they're in the same boat as everybody else and their returns are either MFJ or MFS and that's it. For a couple making over $300K the marriage penalty can be pretty high in lots of areas.

Bob

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