Last March (2010) at the Estate and Gift Tax Conference of the Taxation Section of the California State Bar, an IRS representative reported that the IRS was launching a "compliance initiative" intended to uncover unreported gifts of real estate. While the initiative is not aimed at same-sex couples, it is likely to affect many such couples. That is because RDPs, same-sex spouses, and cohabitants often change title to the home once they begin living together. And they rarely file a gift tax return. Yesterday the Wall Street Journal reported that this program is well under way in many states but has hit a snag in California. Read More ...

2010 is the first year that registered or married same-sex couples in California, Washington, and Nevada were expected to file single returns splitting all income, including income from wages and from self-employment. Most couples and tax return preparers that I have talked with have done their best to comply with these income splitting rules. Now numerous taxpayers are receiving form letters from the IRS that appear to challenge this reporting position. If you have received any such letters, you will want to read more of this post. Read More ...