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Utahns' tax results could turn on court's gay marriage decision

Published April 15, 2014 10:02 am

Couples who filed jointly might have to pay penalty if Amendment 3 is upheld in Denver.
This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

After deductions have been tallied, checks have been cut and April 15 fades into a distant memory, most Utahns will stop stressing about their taxes.

But for the more than 1,300 married same-sex couples who may be filing joint returns for the first time, Tax Day offers little comfort.

An appeal in federal court still hangs in the balance, and it could decide whether these marriages — and the couples' joint tax filings — will be accepted by the state.

For those couples affected, that could mean shelling out hundreds to thousands of dollars to adjust their tax filings months down the road.

"It's caused a lot of people confusion and frustration, but also fear — the worry that if the decision is reversed, you and your spouse might end up with a big tax bill," said tax attorney and gay rights activist Michelle Turpin. "It's not just an emotional cost that these couples would have to deal with, but a very real dollars and cents cost."

The 10th Circuit Court of Appeals is expected to rule on whether it supports or rejects U.S. District Judge Robert J. Shelby's historic Dec. 20 ruling that allowed gay and lesbian couples to wed late last year.

If the high court overturns Shelby's decision, it's unclear what would happen to the marriages performed in the 17 days before the U.S. Supreme Court issued a stay, halting the weddings.

So far, the Utah State Tax Commission has allowed such couples to file their taxes in the same manner as opposite-sex spouses, despite the state's reluctance to recognize same-sex unions.

The new tax policy, which is in accord with an Internal Revenue Service policy issued last year, also allows the joint filings of gay and lesbian Utah residents who legally married elsewhere.

But there's a catch:

"Any questions regarding the validity of Utah same-sex marriages or any legal requirement for the state to recognize same-sex marriages performed in Utah or any other state will be determined by the federal courts or other appropriate authorities," the Tax Commission tax.utah.gov/notice/2014-01-15.pdf">explained in a Jan. 15 memorandum — its final word on the issue.

Turpin said that gives the state "an out," meaning the Tax Commission's position may change depending on what federal courts decide.

"My phone has been ringing off the hook with calls from folks all asking the same question: 'How are we supposed to file?' " Turpin said. "Since we don't know what's going to be legal or illegal down the road, or what decisions the differing powers that be are going to make, all we can say is here are some pros and here are some cons of doing it one way or another. The real answer is we don't really know."

For couples like Josh Barlow and Kasey Sanderson, it's a question they'd rather not have hanging over them.

"What happens if, heaven forbid, [the federal appeals court] were to say, 'No your marriage is no longer valid?' "

Barlow asked. "Who knows what would happen. It's scary not knowing what that would mean for us."

Barlow and Sanderson were married in Salt Lake County on Dec. 23, 2013.

In February, they filed their state and federal taxes as legally recognized spouses for the first time in their seven-year relationship.

Barlow said they did it "as soon as we could — before the Tax Commission changed its mind."

They share a house, a child and their finances are inextricably intertwined.

"The uncertainty of whether our marriage is going to remain recognized by the state does weigh really heavily on us," Barlow said. "It's not only us that it affects, but also our son."

It's not clear when the 10th Circuit Court of Appeals will issue its ruling, though experts have estimated the three-judge panel that heard last week's arguments in the Kitchen v. Herbert case may rule sometime in the next two months.

Even then, it wouldn't be the final word.

Depending on which way the high court rules, the losing side is likely to appeal its case to the U.S. Supreme Court, leaving the question of whether Utah same-sex couples' marriages are legal open-ended.

"Let's just say the 10th Circuit rules in the attorney general's favor," Turpin said. "At that point, for all we know, based on the language in the [Tax Commission memorandum], the commission could come down and say, 'We've decided we're not going to recognize all those joint returns, pay us back the difference.' We're just staying tuned."

State and federal tax returns are due before the end of the day April 15.

mlang@sltrib.com

Twitter: @Marissa_Jae —

It's Tax Day

Income tax returns are due by 11:59 p.m. Tuesday, April 15. If needed, a deadline extension can be requested at IRS.gov.

Extending the filing deadline does not extend the payment deadline. Penalties and interest can still be applied. Payment plans are available.

Utahns with questions about state taxes should contact the Utah State Tax Commission or visit their website at tax.utah.gov.