IRS final regs defining marital status in the tax code are effective Sept. 2, 2016. They contain few changes from the proposed regs issued in Oct. 2015.
The proposed regs said a marriage of two individuals is recognized for federal tax purposes if it is recognized by any state, possession, or U.S. territory. The final regs establish a separate rule for domestic v. foreign marriages.
Domestic marriages are unchanged from the proposed regs and are unaffected by where a couple lives (i.e., they now live in a state that does not recognize same-sex marriages).
A couple married under another country’s laws are married for federal tax purposes if the marriage would be recognized as a marriage under the laws of at least one state, possession or U.S. territory.
Unchanged from the proposed regs is that domestic partnerships and similar arrangements that are not marriages under state law are not considered marriages under the tax code. The changes ensure that only couples in a “marriage” and not divorced are treated as married. The IRS intends to try to use the term “spouse” instead of “husband” and “wife.” [T.D. 9785]