Tax Professionals Need Legal Consent When Filing Registered Domestic Partner Returns
Filing returns for California registered domestic partners (RDPs) has been a complicated topic on our tax technical support forum, CW Connect, this tax season. To make things easier for tax professionals, ClientWhys has developed a free, downloadable, fillable PDF worksheet and engagement letter, as well as a Sec 7216 Consent to Disclose agreement.
Preparing the tax returns of RDPs includes some unique complications. For California purposes, the partners must file as married individuals (1), but for Federal purposes the partners must file as unmarried individuals (2). Sec 7216 of the Internal Revenue Code (3) bars disclosure of tax return information to third parties without informed consent. Thus, for Federal tax purposes, disclosing the tax information of one partner to the other partner is technically a violation of Sec 7216, even though the community and separate property worksheet provided by the IRS asks for the name and SSN of both partners.
Federal law requires a consent form be provided to RDPs. Unless authorized by law, tax preparers cannot disclose, without consent, tax return information to third parties for purposes other than the preparation and filing of a tax return.
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(1) California Law (SB 1827 effective January 1, 2007) – requires RDPs to use the same filing status as married couples. Thus, they must use the married joint, married separate, or surviving spouse (if otherwise qualified) filing status for their California return(s).
(2) Defense of Marriage Act (DOMA), Public Law 104-199 – enacted September 21, 1996, whereby the federal government defines marriage as a legal union between one man and one woman. Because of DOMA, for federal purposes an RDP or a same-sex married (SSM) individual cannot be considered a “spouse,” which affects certain issues related to RDP and SSM individuals for their individual Federal tax returns.
Lee Reams Sr.
Lee T. Reams is the Chief Technical Officer of ClientWhys. He is also an Enrolled Agent having managed a 600-plus client tax practice. Educated as an engineer, with a Bachelor's Degree in Mechanical Engineering, Lee left his engineering career in 1975 to expand his part-time tax practice into a full-time career.