With some time to reflect, the administration’s shift in position raises some interesting practical questions. As mentioned in my earlier post, the administration’s decision leaves the door open to others to intervene to defend section 3 of DOMA in pending suits. But what about tax controversies? In fact, one of the two cases mentioned by the Attorney General in his letter is an estate tax case.
How will the administration’s decision play out in this and other tax cases?
I’m not aware of anyone being able to intervene in a federal tax controversy outside of very narrow circumstances (e.g., Tax Ct. Rs. 216, 225, 245, and 325). Because there is no one else to defend section 3 of DOMA in many (if not most or all) tax cases, does that mean that DOMA will no longer be enforced as applied to the federal tax laws? Or will it only not be enforced against same-sex couples who reside in circuits that have left the question of the appropriate equal protection scrutiny as yet undecided? Or will this merely be taken care of at an administrative level before matters get to court, in which case intervention (and outside scrutiny) would be an impossibility in any event given the privacy protections given to taxpayers with regard to the prelitigation stages of their tax disputes? The letter from the Attorney General to House Speaker Boehner says that the executive branch will continue to enforce section 3 of DOMA. But how does the IRS enforce a law at the administrative level when they know that they are going to cave on DOMA’s application to the tax laws when the administrative proceeding reaches the stage of litigation and there appears to be no one else to step into your shoes in the litigation? Wouldn’t that be a colossal waste of agency resources? Clearly, this rather welcome policy shift raises more questions than it answers.
Addendum: There is also talk of having Congress appoint other attorneys to argue in support of DOMA. But how would that work in a tax controversy? Many tax controversies involve multiple issues. Would these outside attorneys take over the entire case or just the part related to DOMA? Given the pervasiveness of marital and family status considerations in the application of the tax laws can a line really be drawn between the two? Whether or not the outside attorneys fully step into the government’s shoes, how much access would these outside attorneys be given to private taxpayer information? Would they be permitted to, in essence, go on a fishing expedition for other issues to litigate from the relevant taxable year(s)? Would there be a risk that they might pursue issues against this taxpayer that the IRS generally would not, possibly in an effort to force a settlement of the case to avoid having a court rule that DOMA is unconstitutional? Would Congress amend the provision in the Internal Revenue Code (section 6103) that strictly limits the disclosure of taxpayer information to cover these outside attorneys? If not, what would prevent them from disclosing all sorts of otherwise confidential taxpayer information? These are just a few thoughts, and I would be interested in hearing if anyone has ever heard of someone other than the IRS or the Department of Justice (which handles tax litigation outside of the Tax Court) enforcing the tax laws in their stead.
H/T to Pat Cain.