What are the tax implications of the zombie apocalypse?

The only certainties in life are death and taxes, but how do you handle the taxes when death doesn't go quite as planned? Law professor Adam Chodorow takes a stab at estate planning for the undead in perhaps the only legal paper to cite both the Internal Revenue Code and Weekend at Bernie's II.

Photo by Daniel Hollister.

Chodorow, a professor at Arizona State University's Sandra Day O'Connor College of Law, authored the paper "Death and Taxes...and Zombies," which will appear in a forthcoming issue of the Iowa Law Review. Chodorow notes that, while the CDC is ready for the zombie apocalypse, the United States Congress has shown no such foresight, leaving us to question whether zombies, vampires, and other members of the undead class will have their estates transferred upon undeath or be able to collect income tax. To rectify that oversight, Chodorow looks, in all earnestness, to existing legal precedent.

After laying out the differences between different zombie types — notably the difference between zombies under the power of others and self-motivating zombies — Chodorow examines the various tax implications of zombification. He goes through the various reasons why a zombie may or may not be considered the same person it was prior to death, noting that a person's transformation into a raving cannibal with no heartbeat might not be enough to consider them legally deceased:

...[I]t seems a stretch to conclude that those who transform seamlessly into zombies should be considered dead. They never lose heart or brain function, though they now function quite differently from before. While it might be tempting to declare them dead, significant line-drawing problems would arise as one tried to distinguish between zombies and those who have suffered some mental or physical breakdown. Put differently, were such zombies to be considered dead because they suffered a personality change, physical disability, or decreased brain function, the door would be open to declaring dead a wide range of people currently considered to be alive.

For instance, someone who suffers a stroke and loses the ability to speak, walks with a shuffle, and undergoes a significant personality change is clearly alive under any existing state standard. Similarly, someone with Alzheimer's or in a vegetative state, whose brain stem alone survives, is considered alive. It would be inconsistent to classify those people as alive, while at the same time classifying those infected by a zombie virus as dead. One difference may be that those afflicted by strokes would likely not develop an overpowering hunger for brains. However, developing a taste for brains cannot be the determinant of whether someone is dead or considered a zombie. The members of numerous aboriginal tribes and Hannibal Lecter practiced cannibalism and would not qualify as either dead or zombies.

He also notes that some people might specifically try to become a zombie — or avoid becoming a zombie — for estate planning purposes:

If people who become zombies are considered dead for federal estate and income tax purposes, little will have changed. Becoming a zombie will be no different than dying from pneumonia, aside from the part where you eat your friends and loved ones. However, other outcomes are possible. For instance, if someone who becomes a zombie is considered not dead (as opposed to undead) for estate and income tax purposes, neither the estate tax nor the basis reset would be triggered. We would be in a situation similar to the one Congress negotiated as part of the Bush tax cuts, which relaxed the basis reset rules in conjunction with eliminating the estate tax. This could turn out well for those intending to hold on to their property for a long time. Alternately, both the estate tax and basis reset could kick in only when a person's zombie was dispatched. Were this the rule, people might have incentives to become zombies to delay the application of the estate tax.

However, these are not the only two options. Until now, the estate tax and income tax have been construed consistently with regard to who is a decedent. This need not be the case. In other words, it is possible that the transition from alive to undead could trigger the estate tax but not the basis reset. Were this to happen, taxpayers who become zombies would be hit twice, and years of tax planning could go out the window. Alternately, becoming a zombie could be deemed not to trigger the estate tax but to allow basis reset. Under this scenario, the government would forego two opportunities to raise revenue, significantly increasing whatever the then current deficit would be, especially if the outbreak were severe.

He also tackles other tricky aspects of zombification: whether a person is still considered married if their spouse has become undead, the administrative problems of resurrecting dead social security numbers, and the difficulty many zombies would likely have in filling out income tax forms.

Chodorow then moves on the questions of other undead creatures, namely vampires and ghosts. He notes that vampires would be more likely to be considered non-deceased than zombies would, given that vampires retain their faculties and reproduce, both of which are strong indicators of life. Perhaps the most interesting part of the vampiric tax questions, though, is the implications of the Defense of Marriage Act on marital inheritance. If a vampire is considered non-deceased for the purposes of her estate — which is to say, she retains ownership of her property in undeath — but is no longer considered a "woman" under DOMA, then her marriage might be considered void when she becomes a vampire. If she was then granted the "True Death" (to borrow a phrase from True Blood), her former husband wouldn't inherit her property as a spouse, and wouldn't be able to take advantage of the estate and gift tax marital deduction.

Incidentally, some of these questions may not be entirely fanciful if certain bodily preservation and revival technologies pan out. When I mentioned this paper to an estate planning acquaintance of mine, she told me that she once had a client who was a member of a cryogenics society, and she had to explain to him that she couldn't guarantee that the law would recognize the person revived through cryogenic procedures as the same person who had died. If we managed to reach a point where we could preserve and then revive a dead body, analyses like Chodorow's, silly as it may seem, would be relevant to discussions about marriage, property, inheritance, and legal identity.

"Death and Taxes...and Zombies" is available for free and deserves a read-through, if only for footnotes like this one:

Count Chocula has clearly made a killing on his cereal, and rumor has it that even the Count Who Counts is loaded. While harnessed to the greater good of teaching children to count, it turns out that the Count's OCD-like fascination with numbers turns out to be typical of vampires. See BARBER, supra note 76, at 49 (describing a tradition where people placed bags of grain near a suspected vampire's grave on the theory that the vampire would be compelled to count all the grains, thus occupying the vampire through the night and precluding other, less socially beneficial activities). Batman is also well off, owning a mansion, the bat cave, and all the great toys at his disposal. However, all evidence suggests that he is not a vampire, just some guy who likes to dress up in tights and pretend to be bat-like.

Death and Taxes...and Zombies [Social Science Research Network via Law and the Multiverse via Nerdcore]