Does the IRS (or any state tax agency) ever check as to whether one is actually married or single, vis-à-vis one’s tax filing status?
Last year my (male) partner and I finally were able to get married, and so last year we filed as a married couple for the first time. We did not otherwise inform the federal government about our marital status change, so could we not have continued to file as two single people (on the off chance that would have been to our financial benefit)? Alternatively, could we (two males) have filed as married for the past 20 years without them checking? How would they know this was not accurate?
There was no incentive to notify Social Security (for example) because we each have benefits larger as individuals than we would have as spouses (as I understand it, but by all means correct me if I’m wrong).
And if we filed as single this year, would that send up a flag and would they check out whether we had actually been divorced?
You are required to provide your social security number on your 1040. In other places your SSNs may be tied to your status. Some of these may take them longer to catch, but eventually they will catch you, and you may owe interest and fees. Additionally, you may be criminally liable for some examples of intentional fraud. So there is an incentive to be (mostly) truthful.
I don’t know enough about marriage certificates except that they will almost certainly learn the information from someone else even if you did not inform the government.
In the past, SSNs were not needed, and indeed many examples of fraud were rampant, especially involving dependents.
You could file MFS, that status doesn’t imply a literal separation. In the majority of cases, this status is detrimental, as it disallows many credits and deductions.
ETA: some people mention the “marriage penalty,” when filing MFJ, but that usually means the difference between MFJ vs. single (or HoH/QW), and not MFJ vs. MFS.
Not needed for what? I have been filing my own taxes for 50 years or so and have always been required to include my SS number. If you mean needed for getting married, I don’t remember providing them with my SS number and I have just checked the marriage certificate which does not include that information. On the other hand, I can’t say for certain that we didn’t provide it.
I was, in fact, talking about the difference between married filing jointly and single (not married filing single).
In any case, it sounds like you are describing a passive, wait-for-the-info-to-filter-through sort of system where the IRS relies on its ability to impose interest and penalties many years after the fact so it isn’t actively checking marital status. Is that what you meant?
For dependents. For many of those 50 years, checking was spotty.
Married filing SEPARATE. That part was brought up premptively.
Don’t know if passive is the word, and government bureaucracy isn’t known for efficiency. Red flags are investigated and may lead to an audit or automatic readjustment. I don’t know what would happen if you try to efile as single (whether it would be rejected initially or not), but the risk vs. Reward is high.
You’re clear that it’s illegal to lie about your marital status, right? It’s no less cheating on your taxes than if you fail to declare income. It’s not some soft sneaky way of paying less tax that the IRS will just laugh off if they catch you. Since you clearly know whether you are married, it’s deliberate tax fraud to say otherwise, and it will be treated as such if you get audited. Your marital status on 12/31 determines your status for the entire year of filing.
Yes, all points taken as given. I was not expecting nor asking how to cheat the IRS. Just asking how they know whether one is married or not. Most kinds of income gets reported to the IRS by the entity providing the income (employer, bank, investment company etc.). I suppose they might coordinate with Social Security but not everyone needs to report their marriage status to them. Are there other sources?
Correct me if I’m wrong, but I thought that being married was usually a negative in terms of taxes. If so, while lying about being married could be illegal, it is doubtful going to be a problem anymore than declaring more income than you have.
Lying about not being married if you are could be more of an issue.
(I suppose if one spouse had no income then you could come out ahead. And lying about dependents who have no income is another story.)
I know of a same-sex couple that has been filing jointly for like 40 years. One of them has one of those names that could be either sex, and they just did it. It may have helped that they owned several houses together. They figured no one would ever sit down and say, “Hm, these people seem to be the same sex,” because as I said, it wasn’t obvious from the name. I can’t even think why the IRS would cross reference.
The reason they did this was mainly because one of them had a lot more income than the other. And also, I don’t know if they did it the whole 40 years. (In fact, not having seen their taxes, I can’t actually prove they EVER did it; they said they did.)
It’s legal now at any rate. I don’t know why you would say it was fraud. They considered themselves an economic unit, and they are an economic unit.
I’ve been looking over IRS Publication 501 {PDF} and on page 6 we get about the best information I think. Although it does not explicitly say so, I get the impression that the IRS uses the filer’s State Law for the definition of marriage.
What seems to be clear is that if you are married, you cannot file as a single person; you need to file either as MFJ, MFS or HoH.
When my sister was born in Jan. 1948, my father included her as a dependent on his 1947 tax return. This was, of course, illegal, but SS numbers were not required for dependents. I didn’t get an SS number till I was a teenager looking for a summer job. I don’t recall when it was required to get SS numbers for dependents, but it came long after I moved to Canada. One year later then 1973 when my third was born, we applied for numbers for all three.
When I got my SS number, I just walked into an office and asked for it. Filled out some form, no proof of age, of citizenship, or anything else. I walked out with a card. Simpler times.
I remember well when the requirement for dependent SSN’s began. People were claiming the EIC for children that weren’t theirs, or were not in fact dependents. So the IRS started requiring this and they were checking, making sure the SSN and name matched up as well as making sure the EIC was claimed for a dependent only once.
Most of “the marriage penalty” affected a minority of people even at the worst of times and Bush did a lot to do away with what penalty was there. The present situation depends a lot on individual facts and circumstances. Some people see a huge benefit from filing marriage; some see little difference either way; some see a huge benefit filing separate/single.
Yes, this is correct, and all of it greatly simplified since DOMA was suspended and then even more so with the recent SCOTUS decision.
Going back to the core question of how to prove it: like most of what goes on a tax return, the IRS has no way to verify it themselves. They might bring up in an audit and then the taxpayer would have to provide documentation to prove their marital status, but otherwise the IRS takes your word on it.
Many fraudulent returns have been filed by taking two random names and listing them as spouses on the return. That change of spouse alone isn’t enough to cause the return to be rejected or questioned, though the IRS is getting smarter about these things.
With regards to the requirement for dependents’ SS numbers on tax returns: I have no dependents so this doesn’t affect me and wasn’t part of my original question.
Regarding state vs. federal marriage law: I confess that I assumed that, due to DOMA, if we married legally under state law the feds would still not recognize it for tax purposes. There were a lot of stories going around at the time that same-sex couples legally married in their state had to file as single with the feds, and as married with the state, which was at best a huge hassle, at worst nearly impossible. That’s one of the reasons we didn’t get married sooner, I didn’t want to deal with it.
Hilarity N. Suze’s post is closest to my point (and sort of contradicts my previous paragraph here, although frankly I just didn’t think of it at the time). We are in the same boat as that couple, own a house together, and my husband’s given name is not obviously male. So maybe we could have started filing as married, and the feds would never have known that it wasn’t true. (It works to our advantage a little, because his income is much lower than mine). Again, agreed that it’s never a good idea to try to cheat the IRS. But it appears that, absent dependents, they are not very rigorous about checking up on marital status.
If a divorced couple is having a fight and both try to claim the same child, the second one to attempt it will automatically be rejected. The IRS keeps track of dependent SSNs and almost certainly keeps track of yours, so a “paper” trail is formed.
True. It would also substantially increase the cost of preparing the return, as much more work is needed.
I have no idea what’s needed by Social Security to prove you’re married; I never bothered to even formally change my name with them when I got married a bazillion years ago, but they quickly changed over all my records to my married name.
However, it may be important when you or your husband nears retirement age to let them know. One claiming strategy currently available to married people is for one to claim at retirement age and the other to take the spousal benefit when eligible. (Sorry for the inexact age references here, but I’m uncertain how old you need to be to claim spousal.) Taking spousal benefits does not affect your own benefits, which will continue to grow as if you were taking no benefits. Then, when you hit full retirement age or age 70 (your choice, natch), you switch to your own benefit. You’d have to run the numbers, but this often results in higher lifetime benefits than simply taking your own benefit at retirement age. I decided to take my benefits at age 62; if my husband decides to take his at 70 (possible), he’ll claim spousal on mine when he turns 66 – his benefit at age 70 won’t change by nature of taking spousal, and we’ll have that extra income for those 4 years.
They might be phasing this strategy out, and of course they may change it by the time you retire. But I urge everyone who is nearing retirement age to make an appointment at your local SSA office to discuss claiming options. SS is nowhere near as straightforward as I long thought it must be, and you might as well get every dollar you’re entitled to.
Having said that, I visited my local SSA office last October, and they changed the rules effective January 1, so one of the strategies I discussed with them was no longer available.
I know this doesn’t apply to you, Roderick, but it may to others: Many don’t know that you can claim spousal benefits based on a prior marriage. IIRC you have to have been married at least 10 years and not have remarried, but if you meet the age requirements you can get the benefit and your former spouse doesn’t even have to know you’re getting it.
If a person EFILES a return and a return has already been processed claiming the same dependent, the EFILE of the second return will be rejected. But the person who efiled the return is free to file a paper return which will not be rejected. Then, months later, the IRS will send both parties a letter asking them if they made a mistake and want to amend their returns. If both parties then stand their ground, the IRS might investigate and pursue the matter further, resources allowing.
You assumed correctly. As you may recall, the respondent in the Supreme Court case challenging DOMA was Edith Windsor. She legally married Thea Spyer in Toronto and their marriage was later legally recognized by the State of New York. Spyer passed away and Windsor claimed the spousal exemption on the estate’s federal estate tax return. The government claimed the DOMA prevented her from being the spouse for tax purposes and she challenged that ruling.
(The Justice Department refused to challenge the lower court ruling before the Supreme Court and the Bipartisan Legal Advisory Group (BLAG) defended DOMA before the Court.)