Seventh Circuit Does Not Hear 'Audible Silence'
The CPA Journal, pp. 48-49, October 2010
3 Pages Posted: 10 Apr 2011
Date Written: October 1, 2010
It is generally the norm for a married couple to file a joint return rather than file separately, and for good reason: Doing so generally yields a lower tax liability between the parties. But perhaps beyond the realm of anticipated consequences of filing jointly for a typical taxpayer is the notion of joint and several tax liability. This rule, which is explained in the instructions to Form 1040, is the law under IRC section 6013(d)(3) and provides that both filers are jointly and severally liable for the entire tax liability computed on the taxpayers’ aggregate income. This means either party to the joint return may be held 100% liable for any deficiency assessed against the return, even if only one of the parties was responsible for the error, omission, or misrepresentation that gave rise to the deficiency. IRC section 6015 alleviates the harshness of this rule for "innocent spouses" - that is, those taxpayers who sign a jointly filed return without knowledge of the spouse’s underpayment of tax. This article discusses the Seventh Circuit's application of section 6015 and whether any exceptions exist to the two-year filing deadline mandated by the regulations promulgated thereunder.
Keywords: innocent spouse relief, joint and several liability
JEL Classification: K34
Suggested Citation: Suggested Citation