Definition of Terms Relating to Marital Status, 60609-60617 [2016-21096]

Download as PDF Federal Register / Vol. 81, No. 171 / Friday, September 2, 2016 / Rules and Regulations Executive Orders 12866 and 13563 The Department of State does not consider this rule to be an economically significant regulatory action under Executive Order 12866, Regulatory Planning and Review. The Department has nevertheless reviewed the regulation to ensure its consistency with the regulatory philosophy and principles set forth in both Executive Order 12866 and Executive Order 13563, and certifies that the benefits of this regulation outweigh any cost to the public. Executive Order 13132 This regulation will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. Executive Order 13175 The Department has determined that this rulemaking will not have tribal implications, will not impose substantial direct compliance costs on tribal governments, and will not preempt tribal law. Accordingly, the requirements of Executive Order 13175 do not apply to this rulemaking. Lhorne on DSK30JT082PROD with RULES Paperwork Reduction Act This rule does not impose any new reporting or record-keeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35. Prior to the passage of the FAST Act, passport applicants were already asked to provide their Social Security numbers to obtain or renew passports. With respect to the IML requirements, the applicant does not report his or her status as a covered sex offender to the Department during the application process; rather, the Department obtains that information from other government sources. Therefore, this rulemaking imposes no additional burden on the applicant. List of Subjects in 22 CFR Part 51 Passports. Accordingly, for the reasons set forth in the preamble, the Department has amended 22 CFR part 51 as follows: PART 51—PASSPORTS 1. The authority citation for part 51 is revised to read as follows: ■ VerDate Sep<11>2014 15:05 Sep 01, 2016 Jkt 238001 Authority: 8 U.S.C. 1504; 18 U.S.C. 1621; 22 U.S.C. 211a, 212, 212b, 213, 213n (Pub. L. 106–113 Div. B, Sec. 1000(a)(7) [Div. A, Title II, Sec. 236], 113 Stat. 1536, 1501A–430); 214, 214a, 217a, 218, 2651a, 2671(d)(3), 2705, 2714, 2714a, 2721, & 3926; 26 U.S.C. 6039E; 31 U.S.C. 9701; 42 U.S.C. 652(k) [Div. B, Title V of Pub. L. 103–317, 108 Stat. 1760]; E.O. 11295, Aug. 6, 1966, FR 10603, 3 CFR, 1966– 1970 Comp., p. 570; Pub. L. 114–119, 130 Stat. 15; Sec. 1 of Pub. L. 109–210, 120 Stat. 319; Sec. 2 of Pub. L. 109–167, 119 Stat. 3578; Sec. 5 of Pub. L. 109–472, 120 Stat. 3554; Pub. L. 108–447, Div. B, Title IV, Dec. 8, 2004, 118 Stat. 2809; Pub. L. 108–458, 118 Stat. 3638, 3823 (Dec. 17, 2004). 2. Amend § 51.60 by adding paragraphs (a)(3) and (4), (f), and (g) to read as follows: ■ § 51.60 Denial and restriction of passports. (a) * * * (3) The applicant is certified by the Secretary of the Treasury as having a seriously delinquent tax debt as described in 26 U.S.C. 7345. (4) The applicant is a covered sex offender as defined in 42 U.S.C. 16935a, unless the passport, no matter the type, contains the conspicuous identifier placed by the Department as required by 22 U.S.C. 212b. * * * * * (f) The Department may refuse to issue a passport to an applicant who fails to provide his or her Social Security account number on his or her passport application or who willfully, intentionally, negligently, or recklessly includes an incorrect or invalid Social Security account number. (g) The Department shall not issue a passport card to an applicant who is a covered sex offender as defined in 42 U.S.C. 16935a. Dated: August 23, 2016. David T. Donahue, Acting Assistant Secretary, Bureau of Consular Affairs, Department of State. [FR Doc. 2016–21087 Filed 9–1–16; 8:45 am] BILLING CODE 4710–13–P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 1, 20, 25, 26, 31, and 301 [TD 9785] RIN 1545–BM10 Definition of Terms Relating to Marital Status Internal Revenue Service (IRS), Treasury. ACTION: Final regulations. AGENCY: This document contains final regulations that reflect the holdings of SUMMARY: PO 00000 Frm 00029 Fmt 4700 Sfmt 4700 60609 Obergefell v. Hodges, 576 U.S. ___, 135 S. Ct. 2584 (2015), Windsor v. United States, 570 U.S. ___, 133 S. Ct. 2675 (2013), and Revenue Ruling 2013–17 (2013–38 IRB 201), and that define terms in the Internal Revenue Code describing the marital status of taxpayers for federal tax purposes. DATES: Effective date: These regulations are effective on September 2, 2016. FOR FURTHER INFORMATION CONTACT: Mark Shurtliff at (202) 317–3400 (not toll-free number). SUPPLEMENTARY INFORMATION: Background This document contains amendments to the Income Tax Regulations (26 CFR part 1), the Estate Tax Regulations (26 CFR part 20), the Gift Tax Regulations (26 CFR part 25), the GenerationSkipping Transfer Tax Regulations (26 CFR part 26), the Employment Tax and Collection of Income Tax at Source Regulations (26 CFR part 31), and the Regulations on Procedure and Administration (26 CFR part 301). On October 23, 2015, the Department of the Treasury (Treasury) and the IRS published in the Federal Register (80 FR 64378) a notice of proposed rulemaking (REG–148998–13), which proposed to amend the regulations under section 7701 of the Internal Revenue Code (Code) to provide that, for federal tax purposes, the terms ‘‘spouse,’’ ‘‘husband,’’ and ‘‘wife’’ mean an individual lawfully married to another individual, and the term ‘‘husband and wife’’ means two individuals lawfully married to each other. In addition, the proposed regulations provided that a marriage of two individuals will be recognized for federal tax purposes if that marriage would be recognized by any state, possession, or territory of the United States. Finally, the proposed regulations clarified that the term ‘‘marriage’’ does not include registered domestic partnerships, civil unions, or other similar relationships recognized under state law that are not denominated as a marriage under that state’s law, and the terms ‘‘spouse,’’ ‘‘husband and wife,’’ ‘‘husband,’’ and ‘‘wife’’ do not include individuals who have entered into such a relationship. Written comments responding to the proposed regulations were received, and one person requested a public hearing. A public hearing was held on January 28, 2016; however, the individual who requested the hearing was not able to attend, but did submit supplemental comments. When given the opportunity, no one who attended the hearing asked to speak. After consideration of the E:\FR\FM\02SER1.SGM 02SER1 60610 Federal Register / Vol. 81, No. 171 / Friday, September 2, 2016 / Rules and Regulations comments, Treasury and the IRS adopt the proposed regulations as revised by this Treasury Decision. Lhorne on DSK30JT082PROD with RULES Summary of Comments and Explanation of Revisions The IRS received twelve comments in response to the notice of proposed rulemaking. All comments were considered and are available for public inspection at http:// www.regulations.gov. The comments are summarized and discussed in this preamble. I. Comments on the Proposed Regulations Generally The majority of commenters strongly supported the proposed regulations. Many commended Treasury and the IRS for publishing proposed regulations that reflect the holdings of Obergefell v. Hodges, 576 U.S. ___, 135 S. Ct. 2584 (2015), and Windsor v. United States, 570 U.S. ___, 133 S. Ct. 2675 (2013), instead of relying on sub-regulatory guidance. In general, commenters applauded Treasury and the IRS for determining that, in light of the Windsor and Obergefell holdings, marriages of same-sex couples should be treated the same as marriages of opposite-sex couples for federal tax purposes. One commenter suggested that the regulations specifically reference ‘‘samesex marriage’’ so that the definitions apply regardless of gender and to avoid any potential issues of interpretation. Treasury and the IRS believe that the definitions in the proposed regulations apply equally to same-sex couples and opposite-sex couples, and that no clarification is needed. Proposed § 301.7701–18(a) states, without qualification, that, ‘‘[f]or federal tax purposes, the terms spouse, husband, and wife mean an individual lawfully married to another individual,’’ and that the ‘‘term husband and wife means two individuals lawfully married to each other.’’ The language is specifically gender neutral, which reflects the holdings in Windsor and Obergefell and is consistent with Revenue Ruling 2013–17. Similarly, the language in proposed § 301.7701–18(b) refers to a marriage of two individuals, without specifying gender. Amending the regulations to specifically address a marriage of two individuals of the same sex would undermine the goal of these regulations to eliminate distinctions in federal tax law based on gender. For these reasons, the final regulations do not adopt this comment. One comment reflected an overall negative view of same-sex marriage. However, the comment did not recommend any specific amendment to VerDate Sep<11>2014 15:05 Sep 01, 2016 Jkt 238001 the proposed regulations. Because this comment addresses issues outside the scope of these regulations, the final regulations do not address this comment. II. Comments on Proposed § 301.7701– 18(a) Regarding the Definition of Terms Relating to Marital Status Section 301.7701–18(a) of the proposed regulations provides that for federal tax purposes, the terms ‘‘spouse,’’ ‘‘husband,’’ and ‘‘wife’’ mean an individual lawfully married to another individual. The term ‘‘husband and wife’’ means two individuals lawfully married to each other. The preamble to the proposed regulations explains that after Windsor and Obergefell, marriages of couples of the same sex should be treated the same as marriages of couples of the opposite sex for federal tax purposes, and therefore, the proposed regulations interpret these terms in a neutral way to include samesex as well as opposite-sex couples. The overwhelming majority of commenters expressed support for proposed § 301.7701–18(a). However, one of the commenters recommended that the IRS update all relevant forms to use the gender-neutral term ‘‘spouse’’ instead of ‘‘husband and wife.’’ The commenter stated that updating the forms to use gender-neutral terms would be cost-neutral and would more accurately reflect the varied composition of today’s families. The commenter further stated that updating the forms to be inclusive of same-sex couples would increase government efficiency by alleviating confusion, delays, and denials caused by current forms using outdated terms. The commenter’s recommendation relates to forms and is therefore outside the scope of these final regulations. Nevertheless, Treasury and the IRS will consider the commenter’s recommendation when updating IRS forms and publications. III. Comments on Proposed § 301.7701– 18(b) Regarding Persons Who Are Married for Federal Tax Purposes Section 301.7701–18(b) of the proposed regulations provides that a marriage of two individuals is recognized for federal tax purposes if the marriage would be recognized by any state, possession, or territory of the United States. The comments received on paragraph (b) are summarized below. A. Comment That Proposed § 301.7701– 18(b) is Redundant in Light of Obergefell and Should be Removed One commenter stated that proposed § 301.7701–18(b) is redundant and PO 00000 Frm 00030 Fmt 4700 Sfmt 4700 unnecessary in light of Obergefell. According to the commenter, after Obergefell, same-sex marriage should be recognized in every state. Therefore, the commenter states that there is no need for a definition of marriage for federal tax purposes and proposed § 301.7701– 18 (b) should not be finalized. Treasury and the IRS disagree that proposed § 301.7701–18(b) is unnecessary in light of Obergefell. The purpose of publishing these regulations is to ensure that, regardless of the term used in the Code, a marriage between two individuals entered into in, and recognized by, any state, possession, or territory of the United States will be treated as a marriage for federal tax purposes. The majority of comments supporting the proposed regulations agree with this view and specifically applaud Treasury and the IRS for publishing regulations to make this clear rather than relying on subregulatory guidance. Accordingly, the comment is not adopted and a definition of marriage for federal tax purposes is included in the final regulations under § 301.7701–18(b). However, the definition in proposed § 301.7701–18(b) is amended by these final regulations, as described below. B. Comment That the Language in the Proposed Rule Should be Clarified To Eliminate Unintended Consequences Another commenter recommended amending § 301.7701–18(b) of the proposed regulations to simply state that the determination of an individual’s marital status will be made under the laws of the relevant state, possession, or territory of the United States or, where appropriate, under the laws of the relevant foreign country (for example, the country where the marriage was celebrated or, if conflict of laws questions arise, another country). The commenter pointed out that this revision is needed to ensure that a couple’s intended marital status is recognized by the IRS. Specifically, the commenter explains that the language in proposed § 301.7701–18(b) makes it possible for unmarried couples living in a state that does not recognize commonlaw marriage to be treated as married for federal tax purposes if the couple would be treated as having entered into a common-law marriage under the law of any state, possession, or territory of the United States. Next, the commenter explains that the language of the proposed regulations could result in questions about the validity of a divorce. Under Revenue Ruling 67–442, a divorce is recognized for federal tax purposes unless the divorce is invalidated by a court of E:\FR\FM\02SER1.SGM 02SER1 Lhorne on DSK30JT082PROD with RULES Federal Register / Vol. 81, No. 171 / Friday, September 2, 2016 / Rules and Regulations competent jurisdiction. The language of the proposed regulations would undermine this longstanding revenue ruling if any state would recognize the couple as still married despite the divorce. Finally, the commenter states that the language of proposed § 301.7701–18(b) could create a conflict with proposed § 301.7701–18(c) if at least one state, possession, or territory of the United States recognizes a couple’s registered domestic partnership, civil union, or other similar relationship as marriage. The commenter points out that in such a situation, regardless of the couple’s intention and where they entered into their alternative legal relationship, they could be treated as married for federal tax purposes under the language of proposed § 301.7701–18(b) if any state, possession, or territory recognizes their alternative legal relationship as a marriage. According to the commenter, these examples demonstrate that the language in proposed § 301.7701–18(b) could be interpreted to treat couples who divorce or who never intended to enter into a marriage under the laws of the state where they live or where they entered into an alternative legal relationship as married for federal tax purposes. Without a change to proposed § 301.7701–18(b), these couples would be required to analyze the laws of all the states, possessions, and territories of the United States to determine whether any of these laws would fail to recognize their divorce or would denominate their alternative legal relationship as a marriage This was not the intent of the proposed regulations. Rather, the proposed regulations were intended to recognize a marriage only when a couple entered into a relationship denominated as marriage under the law of any state, territory, or possession of the United States or under the law of a foreign jurisdiction if such a marriage would be recognized by any state, possession, or territory of the United States. To address these concerns, § 301.7701–18(b) is revised in the final regulations to provide a general rule for recognizing a domestic marriage for federal tax purposes and a separate rule for recognizing foreign marriages for federal tax purposes (discussed in section III.C. Comments on Marriages Entered Into in Foreign Jurisdictions of this preamble). Accordingly, under the general rule in § 301.7701–18(b)(1) of the final regulations, a marriage of two individuals is recognized for federal tax purposes if the marriage is recognized by the state, possession, or territory of VerDate Sep<11>2014 15:05 Sep 01, 2016 Jkt 238001 the United States in which the marriage is entered into, regardless of the married couple’s place of domicile. This revision addresses the concerns raised by the commenter and ensures that only couples entering into a relationship denominated as marriage, and who have not divorced, are treated as married for federal tax purposes. By relying on the place of celebration to determine which state, possession, or territory of the United States is the point of reference for determining whether a couple is married for federal tax purposes, this rule is consistent with the longstanding position of Treasury and the IRS regarding the determination of marital status for federal tax purposes. See Revenue Ruling 2013–17; Revenue Ruling 58–66 (1958–1 CB 60). C. Comments on Marriages Entered Into in Foreign Jurisdictions Section 301.7701–18(b) of the proposed regulations generally provides that a marriage of two individuals is recognized for federal tax purposes if the marriage would be recognized by any state, possession, or territory of the United States. The preamble to the proposed regulations explains that under this rule, as a matter of comity, a marriage conducted in a foreign jurisdiction will be recognized for federal tax purposes if that marriage would be recognized in at least one state, possession, or territory of the United States. The rule in § 301.7701– 18(b) of the proposed regulations was intended to address both domestic and foreign marriages, regardless of where the couple is domiciled and regardless of whether the couple ever resides in the United States (or a possession or territory of the United States). One commenter suggested amending the proposed regulation to recognize marriages performed in any foreign jurisdiction, for federal tax purposes, if the marriage is recognized in at least one state, possession, or territory of the United States. Similarly, another commenter recommended amending the proposed regulation to reflect the discussion in the preamble to the proposed regulation regarding the recognition of marriages conducted in foreign jurisdictions. This commenter noted that the preamble to the proposed regulation states, ‘‘[W]hether a marriage conducted in a foreign jurisdiction will be recognized for federal tax purposes depends on whether that marriage would be recognized in at least one state, possession, or territory of the United States.’’ The commenter recommended that, rather than relying on the preamble, language should be PO 00000 Frm 00031 Fmt 4700 Sfmt 4700 60611 included in the regulations’ text making this recognition explicit. Proposed § 301.7701–18(b) was drafted to apply to both domestic and foreign marriages. In light of the comments, the proposed rule has been amended to be more explicit. To clarify how foreign marriages will be recognized for federal tax law, § 301.7701–18(b) has been amended to provide a specific rule for foreign marriages. Accordingly, a new paragraph (b)(2) has been added to § 301.7701–18 to provide that two individuals entering into a relationship denominated as marriage under the laws of a foreign jurisdiction are married for federal tax purposes if the relationship would be recognized as marriage under the laws of at least one state, possession, or territory of the United States. This rule enables couples who are married outside the United States to determine marital status for federal tax purposes, regardless of where they are domiciled and regardless of whether they ever reside in the United States. Although this rule requires couples to review the laws of the various states, possessions, and territories to determine if they would be treated as married, it is sufficient if they would be treated as married in a single jurisdiction and there is no need to consider the laws of all of the states, territories, and possessions of the United States. In addition, unlike the language in § 301.7701–18(b) of the proposed regulations, this rule incorporates the place of celebration as the reference point for determining whether the legal relationship is a marriage or a legal alternative to marriage, avoiding the potential conflict with § 301.7701–18(c) identified by the commenter, above. Finally, this rule avoids the concern that a couple intending to enter into a legal alternative to marriage will be treated as married because this rule recognizes only legal relationships denominated as marriage under foreign law as eligible to be treated as marriage for federal tax purposes. This separate rule for foreign marriages in § 301.7701–18(b)(2) is consistent with the proposed regulations’ intent, as described in the preamble to the notice of proposed rulemaking, and provides the clarity commenters request. D. Comment on Common-Law Marriages One commenter stated that some states that recognize common-law marriage only do so in the case of opposite-sex couples. Accordingly, the commenter recommended amending the regulations to clarify that common-law marriages of same-sex couples will be recognized for federal tax purposes. The E:\FR\FM\02SER1.SGM 02SER1 Lhorne on DSK30JT082PROD with RULES 60612 Federal Register / Vol. 81, No. 171 / Friday, September 2, 2016 / Rules and Regulations commenter further suggested that any same-sex couple that would have been considered married under the common law of a state but for the fact that the state’s law prohibited same-sex couples from being treated as married under common law be allowed to file an amended return for any open tax year to claim married status. As discussed in the preamble to the proposed regulations, on June 26, 2013, the Supreme Court in Windsor held that Section 3 of the Defense of Marriage Act, which generally prohibited the federal government from recognizing marriages of same-sex couples, is unconstitutional because it violates the principles of equal protection and due process. On June 26, 2015, the Supreme Court held in Obergefell that state laws are ‘‘invalid to the extent they exclude same-sex couples from civil marriage on the same terms and conditions as opposite-sex couples’’ and ‘‘that there is no lawful basis for a State to refuse to recognize a lawful same-sex marriage performed in another State on the ground of its same-sex character.’’ Obergefell, 576 U.S. at l(slip op., at 23, 28). In light of these holdings, Treasury and the IRS determined that marriages of couples of the same sex should be treated the same as marriages of couples of the opposite sex for federal tax purposes. See 80 FR 64378, 64379. Neither the proposed regulations nor these final regulations differentiate between civil marriages and commonlaw marriages, nor is such differentiation warranted or required for federal tax purposes. See Revenue Ruling 58–66 (treating common-law marriage as valid, lawful marriage for federal tax purposes) and Revenue Ruling 2013–17 (reiterating that common-law marriages are valid, lawful marriages for federal tax purposes). Thus, the general rules regarding marital status for federal tax purposes provided in the proposed and final regulations address marital status regardless of whether the marriage is a civil marriage or a common-law marriage. Furthermore, even after the Obergefell decision, there are several states, including some states that recognize common-law marriage, that still have statutes prohibiting same-sex marriage. However, after Obergefell, we are unaware of any state enforcing such statutes or preventing a couple from entering into a common-law marriage because the couple is a same-sex couple. Accordingly, the commenter’s suggestion has not been adopted. In addition, Revenue Ruling 2013–17 does not distinguish between civil marriages and common-law marriages of VerDate Sep<11>2014 15:05 Sep 01, 2016 Jkt 238001 same-sex couples. Therefore, same-sex couples in common-law marriages may rely on Revenue Ruling 2013–17 for the purpose of filing original returns, amended returns, adjusted returns, or claims for credit or refund for any overpayment of tax resulting from the holdings of Revenue Ruling 2013–17 and the definitions provided in these regulations, provided the applicable limitations period for filing such claim under section 6511 has not expired. IV. Comments on Proposed § 301.7701– 18(c) Regarding Persons Who are not Married for Federal Tax Purposes Section 301.7701–18(c) of the proposed regulations provides that the terms ‘‘spouse,’’ ‘‘husband,’’ and ‘‘wife’’ do not include individuals who have entered into a registered domestic partnership, civil union, or other similar relationship not denominated as marriage under the law of a state, possession, or territory of the United States. That section further provides that the term ‘‘husband and wife’’ does not include couples who have entered into such a relationship and that the term ‘‘marriage’’ does not include such relationship. The preamble to the proposed regulations provides several reasons for the rule in proposed regulation § 301.7701–18(c). First, except when prohibited by statute, the IRS has traditionally looked to states to define marriage. Second, regardless of rights accorded to relationships such as civil unions, registered domestic partnerships, and similar relationships under state law, states have intentionally chosen not to denominate those relationships as marriage. Third, some couples deliberately choose to enter into or remain in a civil union, registered domestic partnership, or similar relationship even when they could have married or converted these relationships to marriage, and these couples have an expectation that their relationship will not be treated as marriage for purposes of federal tax law. Finally, no Code provision indicates that Congress intended to recognize civil unions, registered domestic partnerships, or similar relationships as marriages. Several commenters submitted comments addressing this section of the proposed regulations. Many agreed with proposed § 301.7701– 18(c), but three did not. These comments are discussed below. A. Comments That Specifically Agree With Proposed Regulation § 301.7701– 18(c) In addition to the four commenters that expressed strong support for the PO 00000 Frm 00032 Fmt 4700 Sfmt 4700 proposed regulations generally, two commenters provided specific comments agreeing with the position taken in proposed § 301.7701–18(c). One of these commenters stated that because no Code section requires, or even permits, Treasury and the IRS to allow individuals in registered domestic partnerships, civil unions, and other similar relationships, to elect a married filing status under section 6013, any extension of section 6013 is a policy choice that Congress should make. This commenter also noted that to evaluate the rights and obligations created by various state legal relationships to determine if they are the same as relationships denominated as a marriage would be a significant drain on IRS resources. Finally, the commenter provided historical examples demonstrating how states have attempted to change state family law to reduce their residents’ federal income tax obligations. Based on this historical analysis, the commenter concluded that if Treasury and the IRS were to reverse their position on the status of registered domestic partnerships, civil unions, and other similar relationships, there would be nothing to prevent states from permitting a private contract to create an equivalent state-law marriage to enable their residents to choose a filing status that reduces their federal income tax obligations. The second commenter that agreed with proposed § 301.7701–18(c) observed that the proposed regulations respect the choices made by couples who entered into a civil union or registered domestic partnership with the expectation that their relationship will not be treated as a marriage for federal law purposes. The commenter also observed that the proposed regulations recognize that couples deliberately remain in these relationships, rather than marry, for lawful reasons. B. Comments That Disagree With Proposed Regulation § 301.7701–18(c) Three commenters disagreed with the proposed regulations, stating that registered domestic partnerships, civil unions, and similar formal relationships should be treated as marriage for federal tax purposes. Their comments are summarized below. 1. Comments Regarding Relationships With the Same Rights and Responsibilities as Marriage Two of the commenters recommended that the substance of the legal rights and obligations of individuals in registered domestic partnerships, civil unions, and similar relationships should control whether these relationships are E:\FR\FM\02SER1.SGM 02SER1 Lhorne on DSK30JT082PROD with RULES Federal Register / Vol. 81, No. 171 / Friday, September 2, 2016 / Rules and Regulations recognized as marriage for federal tax purposes, rather than the label applied to the relationship. These commenters stated that regardless of whether a relationship is denominated as marriage, any relationship that has the same rights and responsibilities as marriage under state law should be treated as marriage for federal tax purposes. One commenter cited registered domestic partners in California as an example of a relationship not denominated as marriage but with the same rights and responsibilities as marriage under state law. Another commenter cited civil unions in New Jersey and Connecticut as an example of a relationship not denominated as marriage where the couple has the same rights and obligations as spouses. While some states extend the rights and responsibilities of marriage to couples in registered domestic partnerships, civil unions, or other similar relationships, as the commenters point out, these states also retain marriage as a separately denominated legal relationship. We also recognize that some states have permitted couples in those relationships to convert them to marriage under state law. Many of those states have continued to designate marriage separately from alternative legal relationships that are not a marriage, such as registered domestic partnerships, civil unions, or other similar relationships. The IRS has traditionally recognized a couple’s relationship as a marriage if the state where the relationship was entered into denominates the relationship as a marriage. See Revenue Ruling 58–66 (if a state recognizes a common-law marriage as a valid marriage, the IRS will also recognize the couple as married for purposes of federal income tax filing status and personal exemptions). Similarly, the IRS has not traditionally evaluated the rights and obligations provided by a state to determine if an alternative legal relationship should be treated as marriage for federal tax purposes. Adopting the commenters’ recommendation to treat registered domestic partnerships, civil unions, and similar relationships as married for federal tax purposes if the couple has the same rights and responsibilities as individuals who are married under state law would be inconsistent with Treasury and the IRS’s longstanding position to recognize the marital status of individuals as determined under state law in the administration of the federal income tax. This position is, moreover, consistent with the reasoning of the only federal court that has addressed VerDate Sep<11>2014 15:05 Sep 01, 2016 Jkt 238001 whether registered domestic partners should be treated as spouses under the Code. See Dragovich v. U.S. Dept. of Treasury, 2014 WL 6844926 (N.D. Cal. Dec. 4, 2014) (on remand following dismissal of appeal by the Ninth Circuit, 12–16628 (9th Cir. Oct. 28, 2013)) (granting government’s motion to dismiss claim that section 7702B(f) discriminates because it does not interpret the term spouse to include registered domestic partners). In addition, it would be unduly burdensome for the IRS to evaluate state laws to determine if a relationship not denominated as marriage should be treated as a marriage. It would be also be burdensome for taxpayers in these alternative legal relationships, to evaluate state law to determine marital status for federal tax purposes. Besides being burdensome, the determination of whether the relationship should be treated as a marriage could result in controversy between the IRS and the affected taxpayers. This can be avoided by treating a relationship as a marriage only if a state denominates the relationship as a marriage, as the IRS has traditionally done. 2. Comments Regarding Deference to State Law Two of the commenters stated that by not recognizing registered domestic partnerships, civil unions, and other similar relationships as marriage for federal tax purposes, the IRS is disregarding the states’ intent in creating these alternative legal relationships rather than deferring to state law. To illustrate, one of the commenters noted that Illinois affords parties to a civil union the same rights and obligations as married spouses, and that when Illinois extended marriage to same-sex couples, it enacted a statutory provision permitting parties to a civil union to convert their union to a marriage during the one-year period following the law’s enactment. 750 Ill. Comp. Stat. Sec. 75/65 (2014). The Illinois law also provides that, for a couple converting their civil union to a marriage, the date of marriage relates back to the date the couple entered into the civil union. The commenter stated that the fact that couples could convert their civil union to a marriage, and that the date of their marriage would relate back to the date of their union, indicates that Illinois defines civil unions as marriages. The commenter further observed that when Delaware extended the right to marry to same-sex couples, it stopped allowing its residents to enter into civil unions. Following a one-year period PO 00000 Frm 00033 Fmt 4700 Sfmt 4700 60613 during which couples could voluntarily convert their civil union into marriage, Delaware automatically converted into marriage all remaining civil unions (except those subject to a pending proceeding for dissolution, annulment or legal separation), with the date of each marriage relating back to the date that each civil union was established. The commenter concluded that the laws in Delaware and Illinois make it clear that by not recognizing civil unions and domestic partnerships as marriage, the IRS is not deferring to the state’s judgment in defining marital status. Rather than support the commenter’s position, these examples actually support proposed § 301.7701–18(c). As discussed in the preamble to the proposed regulations, states have carefully considered which legal relationships will be recognized as a marriage and which will be recognized as a legal alternative to marriage, and have enacted statutes accordingly. For instance, Illinois did not automatically convert all civil unions into marriages or include civil unions in the definition of marriage. Instead, it allowed couples affected by the new law to either remain in a civil union or convert their civil union into a marriage. Furthermore, under Illinois law, couples who waited longer than one year to convert their civil union into marriage must perform a new ceremony and pay a fee to have their civil union converted into and be recognized as a marriage. Moreover, Illinois continues to allow both samesex couples and opposite-sex couples to enter into civil unions, rather than marriages. The law in Delaware also demonstrates the care that states have taken to determine which legal relationships will be denominated as marriage. In 2014, Delaware law eliminated the separate designation of civil union in favor of recognizing only marriages for couples who want the legal status afforded to couples under state law. On July 1, 2014, Delaware automatically converted all civil unions to marriage by operation of law. Del. Code Ann. tit. 13, Sec. 218(c). Civil unions that were subject to a pending proceeding for dissolution, annulment, or legal separation as of the date the law went into effect, however, were not automatically converted. As a result, these couples are not treated as married under Delaware law, and the dissolution, annulment, or legal separation of their civil union is governed by Delaware law relating to civil unions rather than by Delaware law relating to marriage. Del. Code Ann. tit. 13, Sec. 218(d). E:\FR\FM\02SER1.SGM 02SER1 60614 Federal Register / Vol. 81, No. 171 / Friday, September 2, 2016 / Rules and Regulations Lhorne on DSK30JT082PROD with RULES As these examples demonstrate, states have carefully determined which relationships will be denominated as marriage. In addition, states may retain alternatives to marriage even after allowing couples to convert those relationships to marriage. IRS’s reliance on a state’s denomination of a relationship as marriage to determine marital status for federal tax purposes avoids inconsistencies with a state’s intent regarding the status of a couple’s relationship under state law. 3. Comments Regarding Taxpayer Expectations As explained in the notice of proposed rulemaking, some couples have chosen to enter into a civil union or registered domestic partnership even when they could have married. In addition, some couples who are in civil unions or registered domestic partnerships have chosen not to convert those relationships into marriage when they had the opportunity to do so. In many cases, the choice not to enter into a relationship denominated as marriage was deliberate, and may have been made to avoid treating the relationship as marriage for purposes of federal law, including federal tax law. Two commenters stated that taxpayer expectations do not support § 301.7701– 18(c). According to the commenters, many same-sex couples entered into a domestic partnership or civil union because at the time they were prohibited under state law from marrying. According to the commenters, now that they have the option to marry, some of these couples have remained in domestic partnerships or civil unions not by choice, but because one member of the couple has died, has become incapacitated, or otherwise lacks the capacity to enter into a marriage. One of the commenters stated that these couples are trapped in this alternative legal relationship and have no ability to marry, even if they have an expectation that their relationship be treated as a marriage for federal tax purposes. The other commenter pointed out that some taxpayers may have resisted entering into or converting their relationship into marriage because of a principled opposition to the marriage institution, but may still have an expectation of being treated as married for federal tax purposes. Thus, the commenters conclude, many taxpayers do not voluntarily enter into or remain in alternative legal relationships because of any particular expectation that they will not be treated as married for federal purposes. The commenters stated that even if the type of relationship entered into VerDate Sep<11>2014 15:05 Sep 01, 2016 Jkt 238001 represents a decision not to be treated as married for federal purposes, taxpayer expectations should not be taken into account for purposes of determining whether alternative legal relationships are recognized as marriage for federal tax purposes. One commenter stated that taking taxpayer expectations into account encourages tax-avoidance behavior. The other commenter stated that it is inappropriate for the IRS to determine tax policy based on taxpayers’ expectations of reaping nontax benefits, such as Social Security. However, another commenter, who also disagreed with proposed § 301.7701–18(c), stated the opposite, explaining that non-tax reasons support treating alternative legal relationships as marriage for federal tax purposes. According to this commenter, because nationwide protections for employment and housing are lacking, many same-sex couples remain at risk for termination at work or eviction from an apartment if their sexual orientation is discovered. Similarly, the commenter contends that individuals in the Foreign Service who work overseas may also feel unsafe entering into a same-sex marriage. Therefore, the commenter explained, in light of these realities, registered domestic partnerships, civil unions, and similar relationships provide a level of stability and recognition for many couples through federal programs like Social Security, and, therefore, should be treated as marriages for federal tax purposes. Finally, the commentator stated that recognizing these relationships as marriages for federal tax purposes would not impede the IRS’s ability to effectively administer the internal revenue laws. Treasury and the IRS disagree with the commenters and continue to believe that the regulation should not treat registered domestic partnerships, civil unions, and other similar relationships—entered into in states that continue to distinguish these relationships from marriages—as marriage for federal tax purposes. While not all same-sex couples in registered domestic partnerships, civil unions, or similar relationships had an opportunity to marry when they entered into their relationship, after Obergefell, same-sex couples now have the option to marry under state law. In addition, the fact that some couples may not voluntarily enter into marriage because of a principled opposition to marriage supports not treating alternative legal relationships as marriages for federal tax purposes because this ensures that these couples do not risk having their relationship PO 00000 Frm 00034 Fmt 4700 Sfmt 4700 characterized as marriage. Further, as discussed in the preamble to the proposed regulations, treating alternative legal relationships as marriages for federal tax purposes may have legal consequences that are inconsistent with these couples’ expectations. For instance, the filing status of a couple treated as married for federal tax purposes is strictly limited to filing jointly or filing as married filing separately, which often results in a higher tax liability than filing as single or head of household. After Obergefell, a rule that treats a couple as married for federal tax purposes only if their relationship is denominated as marriage for state law purposes allows couples in a registered domestic partnership, civil union, or similar relationship to make a choice: they may either stay in that relationship and avoid being married for federal tax purposes or they may marry under state law and be treated as married for federal tax purposes. The rule recommended by the commenters would eliminate this choice. 4. Comments Regarding Difficulties Faced by Couples if Alternative Legal Relationships Are Not Treated as Marriage Two commenters stated that not recognizing registered domestic partnerships, civil unions, and other similar relationships as marriages for federal tax purposes makes it difficult for couples in these relationships to calculate their federal tax liability. One commenter explained that when these couples dissolve their relationships, they are required to go through the same processes that spouses go through in a divorce; alimony obligations are calculated in the same way, and property divisions occur in the same way as for spouses. Yet, because they are not treated as married for federal tax purposes, these couples cannot rely on the certainty of tax treatment associated with provisions under the Code such as sections 71 (relating to exclusion from income for alimony and separate maintenance), 215 (relating to the deduction for alimony or separate maintenance payments), 414(p) (defining qualified domestic relations orders), 1041 (relating to transfers of property between spouses incident to divorce), 2056 (relating to the estate tax marital deduction), and 2523 (relating to gifts to spouses). The purpose of these regulations is to define marital status for federal tax law purposes. The fact that the Code includes rules that address transfers of property between individuals who are or were married should not control how marriage is defined for federal tax E:\FR\FM\02SER1.SGM 02SER1 Federal Register / Vol. 81, No. 171 / Friday, September 2, 2016 / Rules and Regulations Lhorne on DSK30JT082PROD with RULES purposes. Rather, as discussed in this preamble, the regulations are consistent with the IRS’s longstanding position that marital status for federal tax purposes is determined based on state law. See Revenue Ruling 2013–17; Revenue Ruling 58–66. Accordingly, the proposed regulations have not been changed based on this comment. In addition, although not addressed specifically in the Code, guidance relating to registered domestic partnerships, civil unions, and other similar relationships, including answers to frequently asked questions, is available at www.irs.gov. 5. Comments Regarding the Fact That the Code Does Not Address the Status of Alternative Legal Relationships After describing the reasons for not treating civil unions, registered domestic partnerships, and similar relationships as marriage for federal tax purposes, the preamble to the proposed regulations states ‘‘Further, no provision of the Code indicates that Congress intended to recognize as marriages civil unions, registered domestic partnerships, or similar relationships.’’ That language makes clear that the Code is silent with respect to alternative legal relationships, and therefore, does not preclude the IRS from not recognizing these relationships as marriage for federal tax purposes. Two commenters took issue with this language and stated that the government should not interpret the lack of a Code provision specifically addressing the marital status of legal alternatives to marriage as an indication of Congressional intent that such relationships should not be recognized as marriage for federal tax purposes. In addition, the commenters explained that the reason Congress did not enact such a provision after DOMA is because it would have been inconsistent with DOMA’s restriction on treating same-sex couples as married for federal law purposes. These comments are unpersuasive. Since DOMA was enacted on September 21, 1996, many states have allowed both same-sex and opposite-sex couples to enter into registered domestic partnerships, civil unions, and similar relationships. Although it would have been inconsistent for Congress to recognize alternative legal relationships between same-sex couples as marriage under DOMA, nothing prevented Congress from recognizing these relationships as marriages for federal tax purposes in the case of opposite-sex couples. Yet, since DOMA was enacted nearly 20 years ago, Congress has passed no law indicating that opposite-sex VerDate Sep<11>2014 15:05 Sep 01, 2016 Jkt 238001 couples in registered domestic partnerships, civil unions, or similar relationships are recognized as married for federal tax purposes. Because no Code provision specifically addresses the marital status of alternative legal relationships for federal tax purposes, there is no indication that Congress intended to recognize registered domestic partnerships, civil unions, or similar relationships as marriage for purposes of federal tax law. C. Final Regulations Under § 301.7701– 18(c) In sum, Treasury and the IRS received twelve comments with respect to the proposed regulations. Only three of those comments disagreed with the approach taken in proposed § 301.7701– 18(c), which provides that registered domestic partnerships, civil unions, and similar relationships not denominated as marriage by state law are not treated as marriage for federal tax purposes. Of the nine comments that supported the proposed regulations, two provided specific reasons why they agreed with the approach taken in proposed § 301.7701–18(c). Accordingly, the majority of comments supported the approach taken in proposed § 301.7701– 18(c). For the reasons discussed above, the points raised by the three comments that disagreed with the approach taken in proposed § 301.7701–18(c) are not persuasive. Treasury and the IRS believe that federal tax law should continue to defer to states for the determination of marital status, and the rule in proposed § 301.7701–18(c) does that. Any other approach would unduly burden the IRS and taxpayers by requiring an interpretation of multiple state laws and potential controversy when disagreements arise regarding this interpretation. In addition, Treasury and the IRS continue to believe that treating couples in registered domestic partnerships, civil unions, and similar relationships not denominated as marriage under state law, as married for federal tax purposes could undermine taxpayer expectations regarding the federal tax consequences of these relationships. To provide a rule that concludes otherwise would leave those couples who choose alternative legal relationships over marriage without a remedy to avoid the federal tax consequences of being married. In contrast, couples who wish to be treated as married may do so after Windsor and Obergefell. While § 301.7701–18(c) of the regulations will continue to provide that registered domestic partnerships, civil unions, and other similar relationships PO 00000 Frm 00035 Fmt 4700 Sfmt 4700 60615 not denominated as marriage under state law are not recognized as married for federal tax purposes, § 301.7701– 18(c) is revised in the final regulations similar to revisions to § 301.7701–18(b) to account for the place of celebration. As discussed in section III. Comments on Proposed § 301.7701–18(b) Regarding Persons Who are Married for Federal Tax Purposes of this preamble, this change is necessary to ensure that there is a point of reference for which state law is applicable when determining whether the alternative legal relationship is recognized as marriage under state law. Accordingly, § 301.7701–18(c) is revised in the final regulations to provide that the terms ‘‘spouse,’’ ‘‘husband,’’ and ‘‘wife’’ and ‘‘husband and wife’’ do not include individuals who have entered into a registered domestic partnership, civil union, or other similar relationship not denominated as a marriage under the law of the state, possession, or territory of the United States where such relationship was entered into, regardless of domicile. V. Comment That the Final Regulations Should Address Community-Property Issues One commenter recommended amending the proposed regulations to make a clear connection between marital status and community property tax treatment under state law. These regulations provide definitions for purposes of determining marital status for federal tax law purposes. These regulations do not provide substantive rules for the treatment of married or non-married couples under federal tax law. Accordingly, because the federal tax treatment of issues that arise under community-property law involves resolution of issues under substantive tax law, which is outside the scope of these regulations, the commenter’s recommendation is not adopted by these final regulations. Effect on Other Documents These final regulations will obsolete Revenue Ruling 2013–17 as of September 2, 2016. Taxpayers may continue to rely on guidance related to the application of Revenue Ruling 2013–17 to employee benefit plans and the benefits provided under such plans, including Notice 2013–61, Notice 2014– 37, Notice 2014–19, Notice 2014–1, and Notice 2015–86 to the extent they are not modified, superseded, obsoleted, or clarified by subsequent guidance. Effective Date These regulations are effective on September 2, 2016. E:\FR\FM\02SER1.SGM 02SER1 60616 Federal Register / Vol. 81, No. 171 / Friday, September 2, 2016 / Rules and Regulations Statement of Availability for IRS Documents IRS Revenue Procedures, Revenue Rulings notices, notices and other guidance cited in this preamble are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402, or by visiting the IRS Web site at http:// www.irs.gov. Special Analyses Certain IRS regulations, including this one, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory impact assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. In addition, because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Accordingly, a regulatory flexibility analysis is not required under the Regulatory Flexibility Act (5 U.S.C. chapter 6). Adoption of Amendments to the Regulations Accordingly, 26 CFR parts 1, 20, 25, 26, 31, and 301 are amended as follows: PART 1—INCOME TAXES Paragraph 1. The authority citation for part 1 continues to read in part as follows: ■ Authority: 26 U.S.C. 7805 * * * Par 2. Section 1.7701–1 is added to read as follows: ■ § 1.7701–1 Definitions; spouse, husband and wife, husband, wife, marriage. (a) In general. For the definition of the terms spouse, husband and wife, husband, wife, and marriage, see § 301.7701–18 of this chapter. (b) Applicability date. The rules of this section apply to taxable years ending on or after September 2, 2016. PART 20—ESTATE TAX; ESTATES OF DECEDENTS DYING AFTER AUGUST 16, 1954 The principal author of these regulations is Mark Shurtliff of the Office of the Associate Chief Counsel, Procedure and Administration. 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. Estate taxes, Reporting and recordkeeping requirements. PART 31—EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT THE SOURCE Par. 9. The authority citation for part 31 continues to read in part as follows: ■ Authority: 26 U.S.C. 7805 * * * Par. 10. Section 31.7701–2 is added to read as follows: ■ § 31.7701–2 Definitions; spouse, husband and wife, husband, wife, marriage. PART 301—PROCEDURE AND ADMINISTRATION Authority: 26 U.S.C. 7805 * * * ■ Par. 5. The authority citation for part 25 continues to read in part as follows: ■ Authority: 26 U.S.C. 7805 * * * 26 CFR Part 25 Par. 6. Section 25.7701–2 is added to read as follows: Gift taxes, Reporting and recordkeeping requirements. ■ 26 CFR Part 26 § 25.7701–2 Definitions; spouse, husband and wife, husband, wife, marriage. Estate, Reporting and recordkeeping requirements. 26 CFR Part 31 Lhorne on DSK30JT082PROD with RULES (a) In general. For the definition of the terms spouse, husband and wife, husband, wife, and marriage, see § 301.7701–18 of this chapter. (b) Applicability date. The rules of this section apply to taxable years ending on or after September 2, 2016. Par. 4. Section 20.7701–2 is added to read as follows: Par. 3. The authority citation for part 20 continues to read in part as follows: ■ PART 25—GIFT TAX; GIFTS MADE AFTER DECEMBER 31, 1954 26 CFR Part 20 Employment taxes, Income taxes, Penalties, Pensions, Railroad retirement, Reporting and recordkeeping requirements, Social Security, Unemployment compensation. 26 CFR Part 301 Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements. Jkt 238001 § 26.7701–2 Definitions; spouse, husband and wife, husband, wife, marriage. (a) In general. For the definition of the terms spouse, husband and wife, husband, wife, and marriage, see § 301.7701–18 of this chapter. (b) Applicability date. The rules of this section apply to taxable years ending on or after September 2, 2016. (a) In general. For the definition of the terms spouse, husband and wife, husband, wife, and marriage, see § 301.7701–18 of this chapter. (b) Applicability date. The rules of this section apply to taxable years ending on or after September 2, 2016. List of Subjects 15:05 Sep 01, 2016 Par. 8. Section 26.7701–2 is added to read as follows: § 20.7701–2 Definitions; spouse, husband and wife, husband, wife, marriage. Drafting Information VerDate Sep<11>2014 Authority: 26 U.S.C. 7805 * * * ■ (a) In general. For the definition of the terms spouse, husband and wife, husband, wife, and marriage, see § 301.7701–18 of this chapter. (b) Applicability date. The rules of this section apply to taxable years ending on or after September 2, 2016. PART 26—GENERATION-SKIPPING TRANSFER TAX REGULATIONS UNDER THE TAX REFORM ACT OF 1986 Par. 7. The authority citation for part 26 continues to read in part as follows: ■ PO 00000 Frm 00036 Fmt 4700 Sfmt 4700 Par. 11. The authority citation for part 301 continues to read in part as follows: ■ Authority: 26 U.S.C. 7805 * * * Par. 12. Section 301.7701–18 is added to read as follows: ■ § 301.7701–18 Definitions; spouse, husband and wife, husband, wife, marriage. (a) In general. For federal tax purposes, the terms spouse, husband, and wife mean an individual lawfully married to another individual. The term husband and wife means two individuals lawfully married to each other. (b) Persons who are lawfully married for federal tax purposes—(1) In general. Except as provided in paragraph (b)(2) of this section regarding marriages entered into under the laws of a foreign jurisdiction, a marriage of two individuals is recognized for federal tax purposes if the marriage is recognized by the state, possession, or territory of the United States in which the marriage is entered into, regardless of domicile. (2) Foreign marriages. Two individuals who enter into a relationship denominated as marriage under the laws of a foreign jurisdiction are recognized as married for federal tax purposes if the relationship would be E:\FR\FM\02SER1.SGM 02SER1 Federal Register / Vol. 81, No. 171 / Friday, September 2, 2016 / Rules and Regulations recognized as marriage under the laws of at least one state, possession, or territory of the United States, regardless of domicile. (c) Persons who are not lawfully married for federal tax purposes. The terms spouse, husband, and wife do not include individuals who have entered into a registered domestic partnership, civil union, or other similar formal relationship not denominated as a marriage under the law of the state, possession, or territory of the United States where such relationship was entered into, regardless of domicile. The term husband and wife does not include couples who have entered into such a formal relationship, and the term marriage does not include such formal relationships. (d) Applicability date. The rules of this section apply to taxable years ending on or after September 2, 2016. John Dalrymple, Deputy Commissioner for Services and Enforcement. Approved: August 12, 2016. Mark J. Mazur, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. 2016–21096 Filed 8–31–16; 4:15 pm] BILLING CODE 4830–01–P DEPARTMENT OF JUSTICE 28 CFR Part 104 [Docket No. CIV 151] RIN 1105–AB49 James Zadroga 9/11 Victim Compensation Fund Reauthorization Act Department of Justice. Final rule. AGENCY: ACTION: This rule finalizes the Interim Final Rule published on June 15, 2016, which implemented recently-enacted statutory changes governing the September 11th Victim Compensation Fund of 2001 (the ‘‘Fund’’). After consideration of all of the public comments filed in response to the Interim Final Rule, the Special Master has concluded that no substantive changes to the Interim Final Rule are needed. Accordingly, this Final Rule adopts as final the provisions of the Interim Final Rule, with only two minor technical corrections. DATES: This final rule takes effect on September 2, 2016. FOR FURTHER INFORMATION CONTACT: Jordana H. Feldman, September 11th Victim Compensation Fund, Civil Lhorne on DSK30JT082PROD with RULES SUMMARY: VerDate Sep<11>2014 15:05 Sep 01, 2016 Jkt 238001 Division, U.S. Department of Justice, 290 Broadway, Suite 1300, New York, NY 10007, telephone 855–885–1555 (TTY 855–885–1558). SUPPLEMENTARY INFORMATION: On December 18, 2015, President Obama signed into law the James Zadroga 9/11 Victim Compensation Fund Reauthorization Act (the ‘‘Reauthorized Zadroga Act’’), Public Law 114–113, Div. O, Title IV. The Act extends the September 11th Victim Compensation Fund of 2001 (the ‘‘Fund’’) which provides compensation to any individual (or a personal representative of a deceased individual) who suffered physical harm or was killed as a result of the terrorist-related aircraft crashes of September 11, 2001, or the rescue and recovery efforts during the immediate aftermath of such crashes or the debris removal efforts that took place in the immediate aftermath of those crashes. On June 15, 2016, Special Master Sheila L. Birnbaum published an Interim Final Rule to revise the existing regulations to implement changes required by the Reauthorized Zadroga Act. (81 FR 38936). Since the issuance of the Interim Final Rule, Sheila Birnbaum has stepped down as Special Master and the Attorney General has appointed Rupa Bhattacharyya in her place, effective July 21, 2016. The Interim Final Rule took effect on the date of publication (June 15, 2016), but provided a 30-day period for interested persons to submit public comments. Special Master Bhattacharyya is issuing this Final Rule, which addresses the issues that have been raised. For the reasons described below, after consideration of all of the public comments, the Special Master has concluded that no substantive changes to the Interim Final Rule are needed. Accordingly, this Final Rule adopts the provisions of the Interim Final Rule without change, except for two minor technical corrections. Background The June 15, 2016, Interim Final Rule (81 FR 38936) provided a brief history of the September 11th Victim Compensation Fund of 2001, the James Zadroga 9/11 Health and Compensation Act of 2010 (Zadroga Act), and the regulations issued by the Special Masters pursuant to those statutes. On December 18, 2015, President Obama signed into law Public Law 114– 113, providing for the reauthorization of the Zadroga Act. The Reauthorized Zadroga Act extends the time period during which eligible claimants may submit claims, increases the Fund’s total funding available to pay claims, creates different categories of claims, PO 00000 Frm 00037 Fmt 4700 Sfmt 4700 60617 directs the Special Master to issue full compensation to eligible claimants, and instructs the Special Master to implement certain changes to the policies and procedures used to evaluate and process claims. The Interim Final Rule addressed those changes mandated by the statute. The Interim Final Rule was published in the Federal Register (81 FR 38936) and became effective on June 15, 2016, and was followed by a 30-day public comment period. The Department received 31 comments since the publication of the Interim Final Rule. The Special Master’s office has reviewed and evaluated each of these comments in preparing this Final Rule. Significant comments received in response to the Interim Final Rule are discussed below. After careful review and consideration, and for the reasons described below, the Special Master has concluded that no substantive changes to the Interim Final Rule are warranted. Accordingly, this Final Rule adopts the provisions of the Interim Final Rule without change, except for two technical corrections, as follows. These are not substantive changes and merely correct minor drafting errors in the wording of the Interim Final Rule as published. (1) In section 104.21, Presumptively covered conditions, this Final Rule corrects an unintended wording error in the second sentence of paragraph (a), by restoring the missing word ‘‘or,’’ in this sentence. (2) In section 104.62, Time limit for filing claims, in paragraph (b), this Final Rule restores the missing cross-reference to paragraph ‘‘(a)’’ of the section. Summary of Comments on the Interim Final Rule and the Special Master’s Response Categories of Claims Many comments focused on the statutory definition of Group A claims and the decision by Congress to define the two categories of claims by reference to the date the Special Master ‘‘postmarks and transmits’’ a final award determination to the claimant. Several commenters argued that the ‘‘cut-off’’ date for inclusion in Group A should have been the date the claim was submitted or filed by the claimant, rather than the date the final award amount was determined by the Special Master. The commenters asserted that claims that had been submitted to the Fund on or before December 17, 2015, but did not have a loss determined by that time, should be considered Group A claims and subject to the standards in effect at the time of their submission. The Reauthorized Zadroga Act makes clear that the critical date is the date E:\FR\FM\02SER1.SGM 02SER1

Agencies

[Federal Register Volume 81, Number 171 (Friday, September 2, 2016)]
[Rules and Regulations]
[Pages 60609-60617]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-21096]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1, 20, 25, 26, 31, and 301

[TD 9785]
RIN 1545-BM10


Definition of Terms Relating to Marital Status

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

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SUMMARY: This document contains final regulations that reflect the 
holdings of Obergefell v. Hodges, 576 U.S. ___, 135 S. Ct. 2584 (2015), 
Windsor v. United States, 570 U.S. ___, 133 S. Ct. 2675 (2013), and 
Revenue Ruling 2013-17 (2013-38 IRB 201), and that define terms in the 
Internal Revenue Code describing the marital status of taxpayers for 
federal tax purposes.

DATES: Effective date: These regulations are effective on September 2, 
2016.

FOR FURTHER INFORMATION CONTACT: Mark Shurtliff at (202) 317-3400 (not 
toll-free number).

SUPPLEMENTARY INFORMATION: 

Background

    This document contains amendments to the Income Tax Regulations (26 
CFR part 1), the Estate Tax Regulations (26 CFR part 20), the Gift Tax 
Regulations (26 CFR part 25), the Generation-Skipping Transfer Tax 
Regulations (26 CFR part 26), the Employment Tax and Collection of 
Income Tax at Source Regulations (26 CFR part 31), and the Regulations 
on Procedure and Administration (26 CFR part 301).
    On October 23, 2015, the Department of the Treasury (Treasury) and 
the IRS published in the Federal Register (80 FR 64378) a notice of 
proposed rulemaking (REG-148998-13), which proposed to amend the 
regulations under section 7701 of the Internal Revenue Code (Code) to 
provide that, for federal tax purposes, the terms ``spouse,'' 
``husband,'' and ``wife'' mean an individual lawfully married to 
another individual, and the term ``husband and wife'' means two 
individuals lawfully married to each other. In addition, the proposed 
regulations provided that a marriage of two individuals will be 
recognized for federal tax purposes if that marriage would be 
recognized by any state, possession, or territory of the United States. 
Finally, the proposed regulations clarified that the term ``marriage'' 
does not include registered domestic partnerships, civil unions, or 
other similar relationships recognized under state law that are not 
denominated as a marriage under that state's law, and the terms 
``spouse,'' ``husband and wife,'' ``husband,'' and ``wife'' do not 
include individuals who have entered into such a relationship.
    Written comments responding to the proposed regulations were 
received, and one person requested a public hearing. A public hearing 
was held on January 28, 2016; however, the individual who requested the 
hearing was not able to attend, but did submit supplemental comments. 
When given the opportunity, no one who attended the hearing asked to 
speak. After consideration of the

[[Page 60610]]

comments, Treasury and the IRS adopt the proposed regulations as 
revised by this Treasury Decision.

Summary of Comments and Explanation of Revisions

    The IRS received twelve comments in response to the notice of 
proposed rulemaking. All comments were considered and are available for 
public inspection at http://www.regulations.gov. The comments are 
summarized and discussed in this preamble.

I. Comments on the Proposed Regulations Generally

    The majority of commenters strongly supported the proposed 
regulations. Many commended Treasury and the IRS for publishing 
proposed regulations that reflect the holdings of Obergefell v. Hodges, 
576 U.S. ___, 135 S. Ct. 2584 (2015), and Windsor v. United States, 570 
U.S. ___, 133 S. Ct. 2675 (2013), instead of relying on sub-regulatory 
guidance. In general, commenters applauded Treasury and the IRS for 
determining that, in light of the Windsor and Obergefell holdings, 
marriages of same-sex couples should be treated the same as marriages 
of opposite-sex couples for federal tax purposes.
    One commenter suggested that the regulations specifically reference 
``same-sex marriage'' so that the definitions apply regardless of 
gender and to avoid any potential issues of interpretation. Treasury 
and the IRS believe that the definitions in the proposed regulations 
apply equally to same-sex couples and opposite-sex couples, and that no 
clarification is needed. Proposed Sec.  301.7701-18(a) states, without 
qualification, that, ``[f]or federal tax purposes, the terms spouse, 
husband, and wife mean an individual lawfully married to another 
individual,'' and that the ``term husband and wife means two 
individuals lawfully married to each other.'' The language is 
specifically gender neutral, which reflects the holdings in Windsor and 
Obergefell and is consistent with Revenue Ruling 2013-17. Similarly, 
the language in proposed Sec.  301.7701-18(b) refers to a marriage of 
two individuals, without specifying gender. Amending the regulations to 
specifically address a marriage of two individuals of the same sex 
would undermine the goal of these regulations to eliminate distinctions 
in federal tax law based on gender. For these reasons, the final 
regulations do not adopt this comment.
    One comment reflected an overall negative view of same-sex 
marriage. However, the comment did not recommend any specific amendment 
to the proposed regulations. Because this comment addresses issues 
outside the scope of these regulations, the final regulations do not 
address this comment.

II. Comments on Proposed Sec.  301.7701-18(a) Regarding the Definition 
of Terms Relating to Marital Status

    Section 301.7701-18(a) of the proposed regulations provides that 
for federal tax purposes, the terms ``spouse,'' ``husband,'' and 
``wife'' mean an individual lawfully married to another individual. The 
term ``husband and wife'' means two individuals lawfully married to 
each other. The preamble to the proposed regulations explains that 
after Windsor and Obergefell, marriages of couples of the same sex 
should be treated the same as marriages of couples of the opposite sex 
for federal tax purposes, and therefore, the proposed regulations 
interpret these terms in a neutral way to include same-sex as well as 
opposite-sex couples.
    The overwhelming majority of commenters expressed support for 
proposed Sec.  301.7701-18(a). However, one of the commenters 
recommended that the IRS update all relevant forms to use the gender-
neutral term ``spouse'' instead of ``husband and wife.'' The commenter 
stated that updating the forms to use gender-neutral terms would be 
cost-neutral and would more accurately reflect the varied composition 
of today's families. The commenter further stated that updating the 
forms to be inclusive of same-sex couples would increase government 
efficiency by alleviating confusion, delays, and denials caused by 
current forms using outdated terms.
    The commenter's recommendation relates to forms and is therefore 
outside the scope of these final regulations. Nevertheless, Treasury 
and the IRS will consider the commenter's recommendation when updating 
IRS forms and publications.

III. Comments on Proposed Sec.  301.7701-18(b) Regarding Persons Who 
Are Married for Federal Tax Purposes

    Section 301.7701-18(b) of the proposed regulations provides that a 
marriage of two individuals is recognized for federal tax purposes if 
the marriage would be recognized by any state, possession, or territory 
of the United States. The comments received on paragraph (b) are 
summarized below.
A. Comment That Proposed Sec.  301.7701-18(b) is Redundant in Light of 
Obergefell and Should be Removed
    One commenter stated that proposed Sec.  301.7701-18(b) is 
redundant and unnecessary in light of Obergefell. According to the 
commenter, after Obergefell, same-sex marriage should be recognized in 
every state. Therefore, the commenter states that there is no need for 
a definition of marriage for federal tax purposes and proposed Sec.  
301.7701-18 (b) should not be finalized.
    Treasury and the IRS disagree that proposed Sec.  301.7701-18(b) is 
unnecessary in light of Obergefell. The purpose of publishing these 
regulations is to ensure that, regardless of the term used in the Code, 
a marriage between two individuals entered into in, and recognized by, 
any state, possession, or territory of the United States will be 
treated as a marriage for federal tax purposes. The majority of 
comments supporting the proposed regulations agree with this view and 
specifically applaud Treasury and the IRS for publishing regulations to 
make this clear rather than relying on sub-regulatory guidance. 
Accordingly, the comment is not adopted and a definition of marriage 
for federal tax purposes is included in the final regulations under 
Sec.  301.7701-18(b). However, the definition in proposed Sec.  
301.7701-18(b) is amended by these final regulations, as described 
below.
B. Comment That the Language in the Proposed Rule Should be Clarified 
To Eliminate Unintended Consequences
    Another commenter recommended amending Sec.  301.7701-18(b) of the 
proposed regulations to simply state that the determination of an 
individual's marital status will be made under the laws of the relevant 
state, possession, or territory of the United States or, where 
appropriate, under the laws of the relevant foreign country (for 
example, the country where the marriage was celebrated or, if conflict 
of laws questions arise, another country). The commenter pointed out 
that this revision is needed to ensure that a couple's intended marital 
status is recognized by the IRS. Specifically, the commenter explains 
that the language in proposed Sec.  301.7701-18(b) makes it possible 
for unmarried couples living in a state that does not recognize common-
law marriage to be treated as married for federal tax purposes if the 
couple would be treated as having entered into a common-law marriage 
under the law of any state, possession, or territory of the United 
States.
    Next, the commenter explains that the language of the proposed 
regulations could result in questions about the validity of a divorce. 
Under Revenue Ruling 67-442, a divorce is recognized for federal tax 
purposes unless the divorce is invalidated by a court of

[[Page 60611]]

competent jurisdiction. The language of the proposed regulations would 
undermine this longstanding revenue ruling if any state would recognize 
the couple as still married despite the divorce.
    Finally, the commenter states that the language of proposed Sec.  
301.7701-18(b) could create a conflict with proposed Sec.  301.7701-
18(c) if at least one state, possession, or territory of the United 
States recognizes a couple's registered domestic partnership, civil 
union, or other similar relationship as marriage. The commenter points 
out that in such a situation, regardless of the couple's intention and 
where they entered into their alternative legal relationship, they 
could be treated as married for federal tax purposes under the language 
of proposed Sec.  301.7701-18(b) if any state, possession, or territory 
recognizes their alternative legal relationship as a marriage.
    According to the commenter, these examples demonstrate that the 
language in proposed Sec.  301.7701-18(b) could be interpreted to treat 
couples who divorce or who never intended to enter into a marriage 
under the laws of the state where they live or where they entered into 
an alternative legal relationship as married for federal tax purposes. 
Without a change to proposed Sec.  301.7701-18(b), these couples would 
be required to analyze the laws of all the states, possessions, and 
territories of the United States to determine whether any of these laws 
would fail to recognize their divorce or would denominate their 
alternative legal relationship as a marriage
    This was not the intent of the proposed regulations. Rather, the 
proposed regulations were intended to recognize a marriage only when a 
couple entered into a relationship denominated as marriage under the 
law of any state, territory, or possession of the United States or 
under the law of a foreign jurisdiction if such a marriage would be 
recognized by any state, possession, or territory of the United States. 
To address these concerns, Sec.  301.7701-18(b) is revised in the final 
regulations to provide a general rule for recognizing a domestic 
marriage for federal tax purposes and a separate rule for recognizing 
foreign marriages for federal tax purposes (discussed in section III.C. 
Comments on Marriages Entered Into in Foreign Jurisdictions of this 
preamble).
    Accordingly, under the general rule in Sec.  301.7701-18(b)(1) of 
the final regulations, a marriage of two individuals is recognized for 
federal tax purposes if the marriage is recognized by the state, 
possession, or territory of the United States in which the marriage is 
entered into, regardless of the married couple's place of domicile. 
This revision addresses the concerns raised by the commenter and 
ensures that only couples entering into a relationship denominated as 
marriage, and who have not divorced, are treated as married for federal 
tax purposes. By relying on the place of celebration to determine which 
state, possession, or territory of the United States is the point of 
reference for determining whether a couple is married for federal tax 
purposes, this rule is consistent with the longstanding position of 
Treasury and the IRS regarding the determination of marital status for 
federal tax purposes. See Revenue Ruling 2013-17; Revenue Ruling 58-66 
(1958-1 CB 60).
C. Comments on Marriages Entered Into in Foreign Jurisdictions
    Section 301.7701-18(b) of the proposed regulations generally 
provides that a marriage of two individuals is recognized for federal 
tax purposes if the marriage would be recognized by any state, 
possession, or territory of the United States. The preamble to the 
proposed regulations explains that under this rule, as a matter of 
comity, a marriage conducted in a foreign jurisdiction will be 
recognized for federal tax purposes if that marriage would be 
recognized in at least one state, possession, or territory of the 
United States. The rule in Sec.  301.7701-18(b) of the proposed 
regulations was intended to address both domestic and foreign 
marriages, regardless of where the couple is domiciled and regardless 
of whether the couple ever resides in the United States (or a 
possession or territory of the United States). One commenter suggested 
amending the proposed regulation to recognize marriages performed in 
any foreign jurisdiction, for federal tax purposes, if the marriage is 
recognized in at least one state, possession, or territory of the 
United States. Similarly, another commenter recommended amending the 
proposed regulation to reflect the discussion in the preamble to the 
proposed regulation regarding the recognition of marriages conducted in 
foreign jurisdictions. This commenter noted that the preamble to the 
proposed regulation states, ``[W]hether a marriage conducted in a 
foreign jurisdiction will be recognized for federal tax purposes 
depends on whether that marriage would be recognized in at least one 
state, possession, or territory of the United States.'' The commenter 
recommended that, rather than relying on the preamble, language should 
be included in the regulations' text making this recognition explicit.
    Proposed Sec.  301.7701-18(b) was drafted to apply to both domestic 
and foreign marriages. In light of the comments, the proposed rule has 
been amended to be more explicit. To clarify how foreign marriages will 
be recognized for federal tax law, Sec.  301.7701-18(b) has been 
amended to provide a specific rule for foreign marriages. Accordingly, 
a new paragraph (b)(2) has been added to Sec.  301.7701-18 to provide 
that two individuals entering into a relationship denominated as 
marriage under the laws of a foreign jurisdiction are married for 
federal tax purposes if the relationship would be recognized as 
marriage under the laws of at least one state, possession, or territory 
of the United States. This rule enables couples who are married outside 
the United States to determine marital status for federal tax purposes, 
regardless of where they are domiciled and regardless of whether they 
ever reside in the United States. Although this rule requires couples 
to review the laws of the various states, possessions, and territories 
to determine if they would be treated as married, it is sufficient if 
they would be treated as married in a single jurisdiction and there is 
no need to consider the laws of all of the states, territories, and 
possessions of the United States. In addition, unlike the language in 
Sec.  301.7701-18(b) of the proposed regulations, this rule 
incorporates the place of celebration as the reference point for 
determining whether the legal relationship is a marriage or a legal 
alternative to marriage, avoiding the potential conflict with Sec.  
301.7701-18(c) identified by the commenter, above. Finally, this rule 
avoids the concern that a couple intending to enter into a legal 
alternative to marriage will be treated as married because this rule 
recognizes only legal relationships denominated as marriage under 
foreign law as eligible to be treated as marriage for federal tax 
purposes. This separate rule for foreign marriages in Sec.  301.7701-
18(b)(2) is consistent with the proposed regulations' intent, as 
described in the preamble to the notice of proposed rulemaking, and 
provides the clarity commenters request.
D. Comment on Common-Law Marriages
    One commenter stated that some states that recognize common-law 
marriage only do so in the case of opposite-sex couples. Accordingly, 
the commenter recommended amending the regulations to clarify that 
common-law marriages of same-sex couples will be recognized for federal 
tax purposes. The

[[Page 60612]]

commenter further suggested that any same-sex couple that would have 
been considered married under the common law of a state but for the 
fact that the state's law prohibited same-sex couples from being 
treated as married under common law be allowed to file an amended 
return for any open tax year to claim married status.
    As discussed in the preamble to the proposed regulations, on June 
26, 2013, the Supreme Court in Windsor held that Section 3 of the 
Defense of Marriage Act, which generally prohibited the federal 
government from recognizing marriages of same-sex couples, is 
unconstitutional because it violates the principles of equal protection 
and due process. On June 26, 2015, the Supreme Court held in Obergefell 
that state laws are ``invalid to the extent they exclude same-sex 
couples from civil marriage on the same terms and conditions as 
opposite-sex couples'' and ``that there is no lawful basis for a State 
to refuse to recognize a lawful same-sex marriage performed in another 
State on the ground of its same-sex character.'' Obergefell, 576 U.S. 
at _(slip op., at 23, 28).
    In light of these holdings, Treasury and the IRS determined that 
marriages of couples of the same sex should be treated the same as 
marriages of couples of the opposite sex for federal tax purposes. See 
80 FR 64378, 64379. Neither the proposed regulations nor these final 
regulations differentiate between civil marriages and common-law 
marriages, nor is such differentiation warranted or required for 
federal tax purposes. See Revenue Ruling 58-66 (treating common-law 
marriage as valid, lawful marriage for federal tax purposes) and 
Revenue Ruling 2013-17 (reiterating that common-law marriages are 
valid, lawful marriages for federal tax purposes). Thus, the general 
rules regarding marital status for federal tax purposes provided in the 
proposed and final regulations address marital status regardless of 
whether the marriage is a civil marriage or a common-law marriage.
    Furthermore, even after the Obergefell decision, there are several 
states, including some states that recognize common-law marriage, that 
still have statutes prohibiting same-sex marriage. However, after 
Obergefell, we are unaware of any state enforcing such statutes or 
preventing a couple from entering into a common-law marriage because 
the couple is a same-sex couple. Accordingly, the commenter's 
suggestion has not been adopted.
    In addition, Revenue Ruling 2013-17 does not distinguish between 
civil marriages and common-law marriages of same-sex couples. 
Therefore, same-sex couples in common-law marriages may rely on Revenue 
Ruling 2013-17 for the purpose of filing original returns, amended 
returns, adjusted returns, or claims for credit or refund for any 
overpayment of tax resulting from the holdings of Revenue Ruling 2013-
17 and the definitions provided in these regulations, provided the 
applicable limitations period for filing such claim under section 6511 
has not expired.

IV. Comments on Proposed Sec.  301.7701-18(c) Regarding Persons Who are 
not Married for Federal Tax Purposes

    Section 301.7701-18(c) of the proposed regulations provides that 
the terms ``spouse,'' ``husband,'' and ``wife'' do not include 
individuals who have entered into a registered domestic partnership, 
civil union, or other similar relationship not denominated as marriage 
under the law of a state, possession, or territory of the United 
States. That section further provides that the term ``husband and 
wife'' does not include couples who have entered into such a 
relationship and that the term ``marriage'' does not include such 
relationship.
    The preamble to the proposed regulations provides several reasons 
for the rule in proposed regulation Sec.  301.7701-18(c). First, except 
when prohibited by statute, the IRS has traditionally looked to states 
to define marriage. Second, regardless of rights accorded to 
relationships such as civil unions, registered domestic partnerships, 
and similar relationships under state law, states have intentionally 
chosen not to denominate those relationships as marriage. Third, some 
couples deliberately choose to enter into or remain in a civil union, 
registered domestic partnership, or similar relationship even when they 
could have married or converted these relationships to marriage, and 
these couples have an expectation that their relationship will not be 
treated as marriage for purposes of federal tax law. Finally, no Code 
provision indicates that Congress intended to recognize civil unions, 
registered domestic partnerships, or similar relationships as 
marriages. Several commenters submitted comments addressing this 
section of the proposed regulations. Many agreed with proposed Sec.  
301.7701-18(c), but three did not. These comments are discussed below.
A. Comments That Specifically Agree With Proposed Regulation Sec.  
301.7701-18(c)
    In addition to the four commenters that expressed strong support 
for the proposed regulations generally, two commenters provided 
specific comments agreeing with the position taken in proposed Sec.  
301.7701-18(c). One of these commenters stated that because no Code 
section requires, or even permits, Treasury and the IRS to allow 
individuals in registered domestic partnerships, civil unions, and 
other similar relationships, to elect a married filing status under 
section 6013, any extension of section 6013 is a policy choice that 
Congress should make. This commenter also noted that to evaluate the 
rights and obligations created by various state legal relationships to 
determine if they are the same as relationships denominated as a 
marriage would be a significant drain on IRS resources. Finally, the 
commenter provided historical examples demonstrating how states have 
attempted to change state family law to reduce their residents' federal 
income tax obligations. Based on this historical analysis, the 
commenter concluded that if Treasury and the IRS were to reverse their 
position on the status of registered domestic partnerships, civil 
unions, and other similar relationships, there would be nothing to 
prevent states from permitting a private contract to create an 
equivalent state-law marriage to enable their residents to choose a 
filing status that reduces their federal income tax obligations.
    The second commenter that agreed with proposed Sec.  301.7701-18(c) 
observed that the proposed regulations respect the choices made by 
couples who entered into a civil union or registered domestic 
partnership with the expectation that their relationship will not be 
treated as a marriage for federal law purposes. The commenter also 
observed that the proposed regulations recognize that couples 
deliberately remain in these relationships, rather than marry, for 
lawful reasons.
B. Comments That Disagree With Proposed Regulation Sec.  301.7701-18(c)
    Three commenters disagreed with the proposed regulations, stating 
that registered domestic partnerships, civil unions, and similar formal 
relationships should be treated as marriage for federal tax purposes. 
Their comments are summarized below.
1. Comments Regarding Relationships With the Same Rights and 
Responsibilities as Marriage
    Two of the commenters recommended that the substance of the legal 
rights and obligations of individuals in registered domestic 
partnerships, civil unions, and similar relationships should control 
whether these relationships are

[[Page 60613]]

recognized as marriage for federal tax purposes, rather than the label 
applied to the relationship. These commenters stated that regardless of 
whether a relationship is denominated as marriage, any relationship 
that has the same rights and responsibilities as marriage under state 
law should be treated as marriage for federal tax purposes. One 
commenter cited registered domestic partners in California as an 
example of a relationship not denominated as marriage but with the same 
rights and responsibilities as marriage under state law. Another 
commenter cited civil unions in New Jersey and Connecticut as an 
example of a relationship not denominated as marriage where the couple 
has the same rights and obligations as spouses.
    While some states extend the rights and responsibilities of 
marriage to couples in registered domestic partnerships, civil unions, 
or other similar relationships, as the commenters point out, these 
states also retain marriage as a separately denominated legal 
relationship. We also recognize that some states have permitted couples 
in those relationships to convert them to marriage under state law. 
Many of those states have continued to designate marriage separately 
from alternative legal relationships that are not a marriage, such as 
registered domestic partnerships, civil unions, or other similar 
relationships.
    The IRS has traditionally recognized a couple's relationship as a 
marriage if the state where the relationship was entered into 
denominates the relationship as a marriage. See Revenue Ruling 58-66 
(if a state recognizes a common-law marriage as a valid marriage, the 
IRS will also recognize the couple as married for purposes of federal 
income tax filing status and personal exemptions). Similarly, the IRS 
has not traditionally evaluated the rights and obligations provided by 
a state to determine if an alternative legal relationship should be 
treated as marriage for federal tax purposes.
    Adopting the commenters' recommendation to treat registered 
domestic partnerships, civil unions, and similar relationships as 
married for federal tax purposes if the couple has the same rights and 
responsibilities as individuals who are married under state law would 
be inconsistent with Treasury and the IRS's longstanding position to 
recognize the marital status of individuals as determined under state 
law in the administration of the federal income tax. This position is, 
moreover, consistent with the reasoning of the only federal court that 
has addressed whether registered domestic partners should be treated as 
spouses under the Code. See Dragovich v. U.S. Dept. of Treasury, 2014 
WL 6844926 (N.D. Cal. Dec. 4, 2014) (on remand following dismissal of 
appeal by the Ninth Circuit, 12-16628 (9th Cir. Oct. 28, 2013)) 
(granting government's motion to dismiss claim that section 7702B(f) 
discriminates because it does not interpret the term spouse to include 
registered domestic partners).
    In addition, it would be unduly burdensome for the IRS to evaluate 
state laws to determine if a relationship not denominated as marriage 
should be treated as a marriage. It would be also be burdensome for 
taxpayers in these alternative legal relationships, to evaluate state 
law to determine marital status for federal tax purposes. Besides being 
burdensome, the determination of whether the relationship should be 
treated as a marriage could result in controversy between the IRS and 
the affected taxpayers. This can be avoided by treating a relationship 
as a marriage only if a state denominates the relationship as a 
marriage, as the IRS has traditionally done.
2. Comments Regarding Deference to State Law
    Two of the commenters stated that by not recognizing registered 
domestic partnerships, civil unions, and other similar relationships as 
marriage for federal tax purposes, the IRS is disregarding the states' 
intent in creating these alternative legal relationships rather than 
deferring to state law.
    To illustrate, one of the commenters noted that Illinois affords 
parties to a civil union the same rights and obligations as married 
spouses, and that when Illinois extended marriage to same-sex couples, 
it enacted a statutory provision permitting parties to a civil union to 
convert their union to a marriage during the one-year period following 
the law's enactment. 750 Ill. Comp. Stat. Sec. 75/65 (2014). The 
Illinois law also provides that, for a couple converting their civil 
union to a marriage, the date of marriage relates back to the date the 
couple entered into the civil union. The commenter stated that the fact 
that couples could convert their civil union to a marriage, and that 
the date of their marriage would relate back to the date of their 
union, indicates that Illinois defines civil unions as marriages.
    The commenter further observed that when Delaware extended the 
right to marry to same-sex couples, it stopped allowing its residents 
to enter into civil unions. Following a one-year period during which 
couples could voluntarily convert their civil union into marriage, 
Delaware automatically converted into marriage all remaining civil 
unions (except those subject to a pending proceeding for dissolution, 
annulment or legal separation), with the date of each marriage relating 
back to the date that each civil union was established. The commenter 
concluded that the laws in Delaware and Illinois make it clear that by 
not recognizing civil unions and domestic partnerships as marriage, the 
IRS is not deferring to the state's judgment in defining marital 
status.
    Rather than support the commenter's position, these examples 
actually support proposed Sec.  301.7701-18(c). As discussed in the 
preamble to the proposed regulations, states have carefully considered 
which legal relationships will be recognized as a marriage and which 
will be recognized as a legal alternative to marriage, and have enacted 
statutes accordingly. For instance, Illinois did not automatically 
convert all civil unions into marriages or include civil unions in the 
definition of marriage. Instead, it allowed couples affected by the new 
law to either remain in a civil union or convert their civil union into 
a marriage. Furthermore, under Illinois law, couples who waited longer 
than one year to convert their civil union into marriage must perform a 
new ceremony and pay a fee to have their civil union converted into and 
be recognized as a marriage. Moreover, Illinois continues to allow both 
same-sex couples and opposite-sex couples to enter into civil unions, 
rather than marriages.
    The law in Delaware also demonstrates the care that states have 
taken to determine which legal relationships will be denominated as 
marriage. In 2014, Delaware law eliminated the separate designation of 
civil union in favor of recognizing only marriages for couples who want 
the legal status afforded to couples under state law. On July 1, 2014, 
Delaware automatically converted all civil unions to marriage by 
operation of law. Del. Code Ann. tit. 13, Sec. 218(c). Civil unions 
that were subject to a pending proceeding for dissolution, annulment, 
or legal separation as of the date the law went into effect, however, 
were not automatically converted. As a result, these couples are not 
treated as married under Delaware law, and the dissolution, annulment, 
or legal separation of their civil union is governed by Delaware law 
relating to civil unions rather than by Delaware law relating to 
marriage. Del. Code Ann. tit. 13, Sec. 218(d).

[[Page 60614]]

    As these examples demonstrate, states have carefully determined 
which relationships will be denominated as marriage. In addition, 
states may retain alternatives to marriage even after allowing couples 
to convert those relationships to marriage. IRS's reliance on a state's 
denomination of a relationship as marriage to determine marital status 
for federal tax purposes avoids inconsistencies with a state's intent 
regarding the status of a couple's relationship under state law.
3. Comments Regarding Taxpayer Expectations
    As explained in the notice of proposed rulemaking, some couples 
have chosen to enter into a civil union or registered domestic 
partnership even when they could have married. In addition, some 
couples who are in civil unions or registered domestic partnerships 
have chosen not to convert those relationships into marriage when they 
had the opportunity to do so. In many cases, the choice not to enter 
into a relationship denominated as marriage was deliberate, and may 
have been made to avoid treating the relationship as marriage for 
purposes of federal law, including federal tax law.
    Two commenters stated that taxpayer expectations do not support 
Sec.  301.7701-18(c). According to the commenters, many same-sex 
couples entered into a domestic partnership or civil union because at 
the time they were prohibited under state law from marrying. According 
to the commenters, now that they have the option to marry, some of 
these couples have remained in domestic partnerships or civil unions 
not by choice, but because one member of the couple has died, has 
become incapacitated, or otherwise lacks the capacity to enter into a 
marriage. One of the commenters stated that these couples are trapped 
in this alternative legal relationship and have no ability to marry, 
even if they have an expectation that their relationship be treated as 
a marriage for federal tax purposes. The other commenter pointed out 
that some taxpayers may have resisted entering into or converting their 
relationship into marriage because of a principled opposition to the 
marriage institution, but may still have an expectation of being 
treated as married for federal tax purposes. Thus, the commenters 
conclude, many taxpayers do not voluntarily enter into or remain in 
alternative legal relationships because of any particular expectation 
that they will not be treated as married for federal purposes.
    The commenters stated that even if the type of relationship entered 
into represents a decision not to be treated as married for federal 
purposes, taxpayer expectations should not be taken into account for 
purposes of determining whether alternative legal relationships are 
recognized as marriage for federal tax purposes. One commenter stated 
that taking taxpayer expectations into account encourages tax-avoidance 
behavior. The other commenter stated that it is inappropriate for the 
IRS to determine tax policy based on taxpayers' expectations of reaping 
nontax benefits, such as Social Security.
    However, another commenter, who also disagreed with proposed Sec.  
301.7701-18(c), stated the opposite, explaining that non-tax reasons 
support treating alternative legal relationships as marriage for 
federal tax purposes. According to this commenter, because nationwide 
protections for employment and housing are lacking, many same-sex 
couples remain at risk for termination at work or eviction from an 
apartment if their sexual orientation is discovered. Similarly, the 
commenter contends that individuals in the Foreign Service who work 
overseas may also feel unsafe entering into a same-sex marriage. 
Therefore, the commenter explained, in light of these realities, 
registered domestic partnerships, civil unions, and similar 
relationships provide a level of stability and recognition for many 
couples through federal programs like Social Security, and, therefore, 
should be treated as marriages for federal tax purposes. Finally, the 
commentator stated that recognizing these relationships as marriages 
for federal tax purposes would not impede the IRS's ability to 
effectively administer the internal revenue laws.
    Treasury and the IRS disagree with the commenters and continue to 
believe that the regulation should not treat registered domestic 
partnerships, civil unions, and other similar relationships--entered 
into in states that continue to distinguish these relationships from 
marriages--as marriage for federal tax purposes. While not all same-sex 
couples in registered domestic partnerships, civil unions, or similar 
relationships had an opportunity to marry when they entered into their 
relationship, after Obergefell, same-sex couples now have the option to 
marry under state law.
    In addition, the fact that some couples may not voluntarily enter 
into marriage because of a principled opposition to marriage supports 
not treating alternative legal relationships as marriages for federal 
tax purposes because this ensures that these couples do not risk having 
their relationship characterized as marriage. Further, as discussed in 
the preamble to the proposed regulations, treating alternative legal 
relationships as marriages for federal tax purposes may have legal 
consequences that are inconsistent with these couples' expectations. 
For instance, the filing status of a couple treated as married for 
federal tax purposes is strictly limited to filing jointly or filing as 
married filing separately, which often results in a higher tax 
liability than filing as single or head of household. After Obergefell, 
a rule that treats a couple as married for federal tax purposes only if 
their relationship is denominated as marriage for state law purposes 
allows couples in a registered domestic partnership, civil union, or 
similar relationship to make a choice: they may either stay in that 
relationship and avoid being married for federal tax purposes or they 
may marry under state law and be treated as married for federal tax 
purposes. The rule recommended by the commenters would eliminate this 
choice.
4. Comments Regarding Difficulties Faced by Couples if Alternative 
Legal Relationships Are Not Treated as Marriage
    Two commenters stated that not recognizing registered domestic 
partnerships, civil unions, and other similar relationships as 
marriages for federal tax purposes makes it difficult for couples in 
these relationships to calculate their federal tax liability. One 
commenter explained that when these couples dissolve their 
relationships, they are required to go through the same processes that 
spouses go through in a divorce; alimony obligations are calculated in 
the same way, and property divisions occur in the same way as for 
spouses. Yet, because they are not treated as married for federal tax 
purposes, these couples cannot rely on the certainty of tax treatment 
associated with provisions under the Code such as sections 71 (relating 
to exclusion from income for alimony and separate maintenance), 215 
(relating to the deduction for alimony or separate maintenance 
payments), 414(p) (defining qualified domestic relations orders), 1041 
(relating to transfers of property between spouses incident to 
divorce), 2056 (relating to the estate tax marital deduction), and 2523 
(relating to gifts to spouses).
    The purpose of these regulations is to define marital status for 
federal tax law purposes. The fact that the Code includes rules that 
address transfers of property between individuals who are or were 
married should not control how marriage is defined for federal tax

[[Page 60615]]

purposes. Rather, as discussed in this preamble, the regulations are 
consistent with the IRS's longstanding position that marital status for 
federal tax purposes is determined based on state law. See Revenue 
Ruling 2013-17; Revenue Ruling 58-66. Accordingly, the proposed 
regulations have not been changed based on this comment. In addition, 
although not addressed specifically in the Code, guidance relating to 
registered domestic partnerships, civil unions, and other similar 
relationships, including answers to frequently asked questions, is 
available at www.irs.gov.
5. Comments Regarding the Fact That the Code Does Not Address the 
Status of Alternative Legal Relationships
    After describing the reasons for not treating civil unions, 
registered domestic partnerships, and similar relationships as marriage 
for federal tax purposes, the preamble to the proposed regulations 
states ``Further, no provision of the Code indicates that Congress 
intended to recognize as marriages civil unions, registered domestic 
partnerships, or similar relationships.'' That language makes clear 
that the Code is silent with respect to alternative legal 
relationships, and therefore, does not preclude the IRS from not 
recognizing these relationships as marriage for federal tax purposes.
    Two commenters took issue with this language and stated that the 
government should not interpret the lack of a Code provision 
specifically addressing the marital status of legal alternatives to 
marriage as an indication of Congressional intent that such 
relationships should not be recognized as marriage for federal tax 
purposes. In addition, the commenters explained that the reason 
Congress did not enact such a provision after DOMA is because it would 
have been inconsistent with DOMA's restriction on treating same-sex 
couples as married for federal law purposes.
    These comments are unpersuasive. Since DOMA was enacted on 
September 21, 1996, many states have allowed both same-sex and 
opposite-sex couples to enter into registered domestic partnerships, 
civil unions, and similar relationships. Although it would have been 
inconsistent for Congress to recognize alternative legal relationships 
between same-sex couples as marriage under DOMA, nothing prevented 
Congress from recognizing these relationships as marriages for federal 
tax purposes in the case of opposite-sex couples. Yet, since DOMA was 
enacted nearly 20 years ago, Congress has passed no law indicating that 
opposite-sex couples in registered domestic partnerships, civil unions, 
or similar relationships are recognized as married for federal tax 
purposes. Because no Code provision specifically addresses the marital 
status of alternative legal relationships for federal tax purposes, 
there is no indication that Congress intended to recognize registered 
domestic partnerships, civil unions, or similar relationships as 
marriage for purposes of federal tax law.
C. Final Regulations Under Sec.  301.7701-18(c)
    In sum, Treasury and the IRS received twelve comments with respect 
to the proposed regulations. Only three of those comments disagreed 
with the approach taken in proposed Sec.  301.7701-18(c), which 
provides that registered domestic partnerships, civil unions, and 
similar relationships not denominated as marriage by state law are not 
treated as marriage for federal tax purposes. Of the nine comments that 
supported the proposed regulations, two provided specific reasons why 
they agreed with the approach taken in proposed Sec.  301.7701-18(c). 
Accordingly, the majority of comments supported the approach taken in 
proposed Sec.  301.7701-18(c).
    For the reasons discussed above, the points raised by the three 
comments that disagreed with the approach taken in proposed Sec.  
301.7701-18(c) are not persuasive. Treasury and the IRS believe that 
federal tax law should continue to defer to states for the 
determination of marital status, and the rule in proposed Sec.  
301.7701-18(c) does that. Any other approach would unduly burden the 
IRS and taxpayers by requiring an interpretation of multiple state laws 
and potential controversy when disagreements arise regarding this 
interpretation. In addition, Treasury and the IRS continue to believe 
that treating couples in registered domestic partnerships, civil 
unions, and similar relationships not denominated as marriage under 
state law, as married for federal tax purposes could undermine taxpayer 
expectations regarding the federal tax consequences of these 
relationships. To provide a rule that concludes otherwise would leave 
those couples who choose alternative legal relationships over marriage 
without a remedy to avoid the federal tax consequences of being 
married. In contrast, couples who wish to be treated as married may do 
so after Windsor and Obergefell.
    While Sec.  301.7701-18(c) of the regulations will continue to 
provide that registered domestic partnerships, civil unions, and other 
similar relationships not denominated as marriage under state law are 
not recognized as married for federal tax purposes, Sec.  301.7701-
18(c) is revised in the final regulations similar to revisions to Sec.  
301.7701-18(b) to account for the place of celebration. As discussed in 
section III. Comments on Proposed Sec.  301.7701-18(b) Regarding 
Persons Who are Married for Federal Tax Purposes of this preamble, this 
change is necessary to ensure that there is a point of reference for 
which state law is applicable when determining whether the alternative 
legal relationship is recognized as marriage under state law. 
Accordingly, Sec.  301.7701-18(c) is revised in the final regulations 
to provide that the terms ``spouse,'' ``husband,'' and ``wife'' and 
``husband and wife'' do not include individuals who have entered into a 
registered domestic partnership, civil union, or other similar 
relationship not denominated as a marriage under the law of the state, 
possession, or territory of the United States where such relationship 
was entered into, regardless of domicile.

V. Comment That the Final Regulations Should Address Community-Property 
Issues

    One commenter recommended amending the proposed regulations to make 
a clear connection between marital status and community property tax 
treatment under state law. These regulations provide definitions for 
purposes of determining marital status for federal tax law purposes. 
These regulations do not provide substantive rules for the treatment of 
married or non-married couples under federal tax law. Accordingly, 
because the federal tax treatment of issues that arise under community-
property law involves resolution of issues under substantive tax law, 
which is outside the scope of these regulations, the commenter's 
recommendation is not adopted by these final regulations.

Effect on Other Documents

    These final regulations will obsolete Revenue Ruling 2013-17 as of 
September 2, 2016. Taxpayers may continue to rely on guidance related 
to the application of Revenue Ruling 2013-17 to employee benefit plans 
and the benefits provided under such plans, including Notice 2013-61, 
Notice 2014-37, Notice 2014-19, Notice 2014-1, and Notice 2015-86 to 
the extent they are not modified, superseded, obsoleted, or clarified 
by subsequent guidance.

Effective Date

    These regulations are effective on September 2, 2016.

[[Page 60616]]

Statement of Availability for IRS Documents

    IRS Revenue Procedures, Revenue Rulings notices, notices and other 
guidance cited in this preamble are published in the Internal Revenue 
Bulletin (or Cumulative Bulletin) and are available from the 
Superintendent of Documents, U.S. Government Printing Office, 
Washington, DC 20402, or by visiting the IRS Web site at http://www.irs.gov.

Special Analyses

    Certain IRS regulations, including this one, are exempt from the 
requirements of Executive Order 12866, as supplemented and reaffirmed 
by Executive Order 13563. Therefore, a regulatory impact assessment is 
not required. It has also been determined that section 553(b) of the 
Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to 
these regulations. In addition, because the regulations do not impose a 
collection of information on small entities, the Regulatory Flexibility 
Act (5 U.S.C. chapter 6) does not apply. Accordingly, a regulatory 
flexibility analysis is not required under the Regulatory Flexibility 
Act (5 U.S.C. chapter 6).

Drafting Information

    The principal author of these regulations is Mark Shurtliff of the 
Office of the Associate Chief Counsel, Procedure and Administration.

List of Subjects

26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 20

    Estate taxes, Reporting and recordkeeping requirements.

26 CFR Part 25

    Gift taxes, Reporting and recordkeeping requirements.

26 CFR Part 26

    Estate, Reporting and recordkeeping requirements.

26 CFR Part 31

    Employment taxes, Income taxes, Penalties, Pensions, Railroad 
retirement, Reporting and recordkeeping requirements, Social Security, 
Unemployment compensation.

26 CFR Part 301

    Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income 
taxes, Penalties, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR parts 1, 20, 25, 26, 31, and 301 are amended as 
follows:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority:  26 U.S.C. 7805 * * *


0
Par 2. Section 1.7701-1 is added to read as follows:


Sec.  1.7701-1  Definitions; spouse, husband and wife, husband, wife, 
marriage.

    (a) In general. For the definition of the terms spouse, husband and 
wife, husband, wife, and marriage, see Sec.  301.7701-18 of this 
chapter.
    (b) Applicability date. The rules of this section apply to taxable 
years ending on or after September 2, 2016.

PART 20--ESTATE TAX; ESTATES OF DECEDENTS DYING AFTER AUGUST 16, 
1954

0
Par. 3. The authority citation for part 20 continues to read in part as 
follows:

    Authority:  26 U.S.C. 7805 * * *

0
Par. 4. Section 20.7701-2 is added to read as follows:


Sec.  20.7701-2  Definitions; spouse, husband and wife, husband, wife, 
marriage.

    (a) In general. For the definition of the terms spouse, husband and 
wife, husband, wife, and marriage, see Sec.  301.7701-18 of this 
chapter.
    (b) Applicability date. The rules of this section apply to taxable 
years ending on or after September 2, 2016.

PART 25--GIFT TAX; GIFTS MADE AFTER DECEMBER 31, 1954

0
Par. 5. The authority citation for part 25 continues to read in part as 
follows:

    Authority:  26 U.S.C. 7805 * * *

0
Par. 6. Section 25.7701-2 is added to read as follows:


Sec.  25.7701-2  Definitions; spouse, husband and wife, husband, wife, 
marriage.

    (a) In general. For the definition of the terms spouse, husband and 
wife, husband, wife, and marriage, see Sec.  301.7701-18 of this 
chapter.
    (b) Applicability date. The rules of this section apply to taxable 
years ending on or after September 2, 2016.

PART 26--GENERATION-SKIPPING TRANSFER TAX REGULATIONS UNDER THE TAX 
REFORM ACT OF 1986

0
Par. 7. The authority citation for part 26 continues to read in part as 
follows:

    Authority:  26 U.S.C. 7805 * * *

0
Par. 8. Section 26.7701-2 is added to read as follows:


Sec.  26.7701-2  Definitions; spouse, husband and wife, husband, wife, 
marriage.

    (a) In general. For the definition of the terms spouse, husband and 
wife, husband, wife, and marriage, see Sec.  301.7701-18 of this 
chapter.
    (b) Applicability date. The rules of this section apply to taxable 
years ending on or after September 2, 2016.

PART 31--EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT THE 
SOURCE

0
Par. 9. The authority citation for part 31 continues to read in part as 
follows:

    Authority:  26 U.S.C. 7805 * * *


0
Par. 10. Section 31.7701-2 is added to read as follows:


Sec.  31.7701-2  Definitions; spouse, husband and wife, husband, wife, 
marriage.

    (a) In general. For the definition of the terms spouse, husband and 
wife, husband, wife, and marriage, see Sec.  301.7701-18 of this 
chapter.
    (b) Applicability date. The rules of this section apply to taxable 
years ending on or after September 2, 2016.

PART 301--PROCEDURE AND ADMINISTRATION

0
Par. 11. The authority citation for part 301 continues to read in part 
as follows:

    Authority:  26 U.S.C. 7805 * * *


0
Par. 12. Section 301.7701-18 is added to read as follows:


Sec.  301.7701-18  Definitions; spouse, husband and wife, husband, 
wife, marriage.

    (a) In general. For federal tax purposes, the terms spouse, 
husband, and wife mean an individual lawfully married to another 
individual. The term husband and wife means two individuals lawfully 
married to each other.
    (b) Persons who are lawfully married for federal tax purposes--(1) 
In general. Except as provided in paragraph (b)(2) of this section 
regarding marriages entered into under the laws of a foreign 
jurisdiction, a marriage of two individuals is recognized for federal 
tax purposes if the marriage is recognized by the state, possession, or 
territory of the United States in which the marriage is entered into, 
regardless of domicile.
    (2) Foreign marriages. Two individuals who enter into a 
relationship denominated as marriage under the laws of a foreign 
jurisdiction are recognized as married for federal tax purposes if the 
relationship would be

[[Page 60617]]

recognized as marriage under the laws of at least one state, 
possession, or territory of the United States, regardless of domicile.
    (c) Persons who are not lawfully married for federal tax purposes. 
The terms spouse, husband, and wife do not include individuals who have 
entered into a registered domestic partnership, civil union, or other 
similar formal relationship not denominated as a marriage under the law 
of the state, possession, or territory of the United States where such 
relationship was entered into, regardless of domicile. The term husband 
and wife does not include couples who have entered into such a formal 
relationship, and the term marriage does not include such formal 
relationships.
    (d) Applicability date. The rules of this section apply to taxable 
years ending on or after September 2, 2016.

John Dalrymple,
Deputy Commissioner for Services and Enforcement.
    Approved: August 12, 2016.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2016-21096 Filed 8-31-16; 4:15 pm]
 BILLING CODE 4830-01-P