Family can bring us joy, and it can bring us grief It can also bring us tax benefits and tax detriments. Often, as a means of ensuring compliance with Internal Revenue Code provisions that turn on a family relationship, taxpayers are required to document their relationship with a family member. Most visibly, taxpayers are denied an additional personal exemption for a child or other dependent unless they furnish the individual's name, Social Security number, and relationship to the taxpayer.
In this article, I undertake the first systematic examination of these documentation requirements. Given the privileging of the "traditional" family throughout the Code, one might expect to see that same privileging mirrored in the administrative structure that underpins the Code's family tax provisions. Indeed, on their very face, the information-reporting rules that apply to jointly owned income-producing property do just that.
Once the inquiry is expanded to cover other family tax provisions, however, it quickly becomes clear that the administrative structure underpinning the family tax provisions has also been strongly influenced by endemic privilegings along a variety of other axes of subordination--from class to race to gender to sexual orientation. To address and remedy these defects in the administrative structure underpinning the family tax provisions, this article advocates an approach to documenting family for tax purposes that does" not invidiously discriminate among taxpayers.
Family is important to each of us--no matter whether it is the family that we are born into, the family that we choose, or the family that chooses us. Family also plays an important role in determining the size of our tax bills. For instance, having a child may render a taxpayer eligible for the child tax credit, an additional personal exemption, and tax relief for childcare costs incurred to enable her to be gainfully employed. (1) In addition to these benefits, the expenses of adopting a child may be creditable against the taxpayer's tax bill. (2) Taking in a family member or friend might also permit the taxpayer to claim an additional personal exemption and to deduct medical or other expenses paid on that person's behalf. (3) Where the ownership of an interest in a corporation or partnership is relevant to determining tax liability, the taxpayer's ownership is often aggregated with that of her family members--sometimes to the taxpayer's benefit and at other times to her detriment. (4) Similarly, families are sometimes treated as a larger economic unit for tax purposes, with the individual members presumed to be indifferent to the allocation of legal ownership of assets among them. (5) Moreover, the decision to remain single or to couple (whether within or without marriage) opens a veritable Pandora's box of tax consequences. (6)
When taking family into account for all of these purposes, the Internal Revenue Code (Code) clearly privileges the so-called traditional family over all others. Lesbian and gay families fit uncomfortably, if at all, into the normative structure of the Code. (7) Married women who work outside the home may be penalized for this decision. (8) And other nontraditional families (9) often fall through the cracks. (10) For example, in Leonard v. Commissioner, the Tax Court held that a taxpayer who supported a disabled friend and the friend's grandchildren --all of whom lived with her--was eligible to claim an additional personal exemption for each of the children but was ineligible to claim the child-care credit, the child tax credit, the additional child tax credit, or the earned income credit because those same children were not "qualifying" children. (11)
In this Article, I break new ground by undertaking the first systematic examination of the administrative structure that underpins the Code's family tax provisions. (12) In this …