Summary: When a married couple files a joint federal income tax return, each spouse becomes individually responsible for paying the entire amount of the tax associated with that return. Because of this joint and several liability standard, one spouse can be held liable for tax deficiencies assessed after a joint return was filed that were solely attributable to the actions of the other spouse. However, when one spouse, without the knowledge of the other, incurs additional taxes, the other potentially "innocent spouse" can obtain relief from the additional tax liability if certain conditions are met. In response to concerns about the effectiveness of the current innocent spouse provisions and other perceived inequities caused by the joint and several liability standard, this report discusses (1) the potential universe of taxpayers who may be eligible for innocent spouse relief, (2) the Internal Revenue Service's (IRS) procedures for handling requests for innocent spouse relief, (3) whether the innocent spouse provisions afford the same treatment for all taxpayers, (4) the potential effects of replacing the joint and several liability standard with a proportionate liability standard, (5) the potential effects on IRS of requiring it to abide by the terms of divorce decrees when those decrees allocate tax liabilities, and (6) the potential effects on IRS of changing the law so that community income of one spouse cannot be seized to satisfy tax liabilities incurred by the other spouse before their marriage.
