Need to Amend the Internal Revenue Code to Extend Innocent Spouse Rule to Community Property Situations

GGD-77-56: Published: Jul 12, 1977. Publicly Released: Jul 12, 1977.

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Under current law, the Internal Revenue Code grants relief to an "innocent spouse" on a fraudulent joint return where he or she neither benefits from nor receives income received by the other spouse and not reported. The applicable section of the code does not apply if separate returns are filed by two married persons.

Typically, the cases have concerned married individuals living apart but not legally separated or divorced, where the husband has appropriated the entire community income to his own use, and the wife, filing separately, receives no support or other financial assistance from the husband. The Internal Revenue Service (IRS) has proceeded against the wife directly as the person primarily liable for the Federal income tax on her one-half share, notwithstanding that the husband has appropriated the entire community income to his own use. It does not appear that IRS has ever proceeded against the husband to collect the wife's one-half share of the community tax liability in this situation.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: Section 6013 of the Internal Revenue Code should be amended so that, where certain conditions exist, the separated spouse who does not receive the one-half of community income to which he or she has a vested right under State law is relieved of tax liability to the extent that such liability is attributable to the omission from gross income of the one-half of community income not received.

    Agency Affected:


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