Boyter v. Commissioner

H. David Boyter and Angela Boyter (the Boyters) (plaintiffs) married in 1966. After realizing that their tax liability would be lower if they filed as unmarried individuals, thus avoiding the marriage penalty that results from married individuals paying a greater amount of income taxes than single individuals, the Boyters went through a cycle of divorce and remarriage. The Boyters timed their divorces to ensure that they were unmarried at the end of the taxable year, when the Internal Revenue Code determines whether a couple is married for income-tax purposes. At the end of 1975, the Boyters obtained a divorce in Haiti. Near the beginning of 1976, they remarried in Maryland. The Boyters filed separate income-tax returns for 1975 as unmarried individuals. At the end of 1976, the Boyters obtained a divorce in the Dominican Republic. Near the beginning of 1977, they remarried in Maryland. The Boyters filed separate income-tax returns for 1976 as unmarried individuals. The Commissioner of Internal Revenue (the Commissioner) (defendant) determined that the Boyters had tax deficiencies on their income-tax returns for 1975 and 1976 because their divorces were sham transactions undertaken to avoid the marriage penalty and reduce their tax liability. The United States Tax Court upheld the deficiencies but held instead that the deficiencies occurred because Maryland did not recognize the foreign divorces, meaning that the Boyters remained married. The Boyters appealed.