Daughter Not in Valid Texas Common Law Marriage, Mom Allowed to Claim as Dependent

The case of Saenz v. Commissioner, TC Summary Opinion 2015-6, turned on whether Leticia Saenz’s daughter, who filed a joint return for 2011, was actually married to the person she filed a joint return with.

The reason this becomes important is due to the requirements to claim a person as a dependent for federal tax purposes.  Regardless of meeting all of the other requirements to claim a child as a dependent, the child cannot be claimed as a dependent if the individual files a joint return for the year in question with that child’s spouse.  [IRC 152(c)(1)(E)]

As her daughter had actually filed a joint return, that presented a problem.  But it turned out not to be insurmountable because Leticia claimed (properly as it turned out) that her daughter was not married under the laws of the state of Texas.

Her daughter’s marriage was an interesting affair.  The daughter had lived with Leticia through August of 2011, along with the daughter’s own child (Leticia’s granddaughter).  The daughter and granddaughter then moved out and moved in with the man she would end up filing a joint return with.  Her brother indicated, in an affidavit submitted at trial, that his sister had left to go with her boyfriend in August 2011.

In April of 2012 this couple filed a joint return for 2012, attaching a statement to their return that they were married.  Her “husband” testified at the trial that he is married to the daughter and, most interesting, had agreed to marry her when they signed the tax return and decided to file jointly.

The IRS contended at trial that the daughter was in a valid Texas common law marriage and had filed a joint return.  While agreeing the latter had taken place, the Court did not agree with the characterization of the arrangement as a valid common law marriage.

The Court noted that under Texas law to have a valid common law marriage three elements must be shown:

  • The couple agreed to be married;
  • After the agreement, they lived together as husband and wife; and
  • They represented to others that they are married

The Court noted that even according to the one person who claimed a marriage existed (the daughter’s “husband”) the decision to “get married” occurred when they decided to file a joint return for 2011 on April 15, 2012.  While IRA contributions can be made as late as that date and treated as deductible for the prior, there’s no similar law allowing for backdated tax marriages nor any Texas statute authorizing marriage by tax election.

Also, the Court noted that the son referenced his sister’s partner as her “boyfriend” and not her husband, indicating that she had not represented to her brother that they were married.

Thus, the Court found that if a common law marriage could have existed, it didn’t exist at December 31, 2011.  Since that was the IRS’s sole objection to granting Leticia an exemption for her daughter and granddaughter, as well as denying credit for them in calculation of the earned income credit or additional child credit, the Tax Court found fully in favor of Leticia.