Chicago partner Sarah Millar was quoted in an Ignites article titled, “IRS DOMA Guidance ‘Helpful,’ but Questions Linger.” The article discusses the Defense of Marriage Act guidance issued by the IRS and Treasury, which grants preferable tax treatment for married same-sex couples regardless of where they live.
“While the new guidance is really helpful, it doesn’t answer all the questions. There is nothing in here about how to apply the rules retroactively.” said Sarah. “Presumably the IRS will provide some type of relief so that the retroactive effect is minimal,” she added.
Plan sponsors should plan to make any necessary changes to plan documents, though the amendments can likely wait until after the deadline. “There is an indication that there will be future guidance, and there will be time allowed for adopting any necessary plan amendments,” said Sarah.
The Department of Labor is expected to issue its own guidance on the treatment of same-sex marriages, though that guidance may have less impact on plans. Sarah said, “I would expect the DOL guidance to address things like how to apply … prohibited transactions rules in terms of who is related.”