Share

Minneapolis Estate Planning and Probate Lawyer Blog

Thursday, December 15, 2011

IRS to Gay Couples: Oops..Sorry About Denying You That Adoption Tax Credit

After my partner gave birth to our wonderful daughter 4 years ago, we immediately began working with a lawyer on the second-parent adoption process. A second-parent adoption is the legal procedure through which the non-birth parent (me) may adopt the child of the biological parent. During the process, our lawyer mentioned that there is a tax credit granted to adopting parents. The one-time tax credit allows adoptive parents to seek “reimbursement” for the money spent on the adoption expenses. Because we are both lawyers, we spent some time researching the adoption credit and decided that it was risky as the IRS sometimes refused the use of the tax credit by same-sex couples when applied toward a second-parent adoption. So, we declined claiming the credit on our return that year.

But, as is true of all things related to same-sex couples right now - things are about to change. The Government Accountability Office criticized the IRS for its failure to properly train staff members on how to handle tax credits and second-parent adoptions. This lead to the unthinkable – the IRS admitted it made a mistake in not giving its auditors proper guidance on this issue.

What was the IRS’s reasoning behind denying the credit? One explanation it gave was that the birth mother does not terminate her parental rights as part of the adoption procedure. While that may be true, it is also irrelevant. There is nothing in the federal tax code that prohibits claiming the adoption credit for adopting a domestic partner’s child.

The IRS did explain that when the taxpayers in question pushed back on the issue, the taxpayers usually won - after spending money and time fighting the IRS. Hopefully, after this, those couples may spend time and money on more importants things: like daycare, diapers and life insurance premiums (until the day when a same-sex couples are granted the same benefits (social security survivor benefits or estate tax free inheritance) as other married automatically get upon marriage.

Of course, this issue would be moot if the nonbiological parent was given the right to be on the birth certificate in the first place. But, that’s a continuing fight for our future rights. As for now, I have one question:

Do we get to amend our 2007 tax return to get this deduction?
 

 

 


Archived Posts

2014
2013
December
November
October
September
August
June
May
April
March
February
January
2012
December
November
October
September
August
July
June
May
April
March
February
January
2011
December
November
October
September
August
July
June
May
April
March
February
January
2010


From within Hennepin County Unique Estate Law represents estate planning and elder law clients throughout Minnesota, including Minneapolis, Edina, Bloomington, St. Louis Park, Minnetonka, Plymouth, Wayzata, Maple Grove, St. Paul, and Brooklyn Park. The Minnesota law firm of Unique Estate Law focuses on all aspects of estate planning, including specialized wills, trusts, powers of attorney and medical directives for married couples, young families, blended families, single parents, gay families and those going through a divorce. Unique Estate Law also handles probate administration, asset protection, Medical Assistance planning, elder law, business succession planning, adoptions and cabin planning.



© 2014 Unique Estate Law | Disclaimer
3800 American Blvd., Suite 1500, Bloomington, MN 55431
| Phone: 952-955-7623
333 Washington Avenue North, Minneapolis, MN 55401
| Phone: 952-955-7623
5775 Wayzata Blvd., St. Louis Park, MN 55416
| Phone: 952-955-7623

Business Succession Planning | Planning for Children | Estate Planning | Asset Protection | Estate Planning for Unmarried Couples | Cabin Planning | Special Needs Planning | Small Business Assistance | Estate Planning for High Net Worth Individuals | Estate Planning | Fees | Probate

TwitterLinked-In PersonalLinked-In CompanyBlog RSS

Attorney Website Design by
Amicus Creative