Washington Law Review


Spouses who file joint tax returns are jointly and severally liable for any resulting tax deficiency. In the past, only innocent spouses—those with no knowledge of the tax understatement—could qualify for relief from such liability. In 1998, Congress expanded existing innocent spouse relief and added two new forms of relief—the separation of liability and discretionary relief provisions. Codified at 26 U.S.C. § 6015(c), separation of liability relief allocates items that give rise to a deficiency to each spouse as if they had filed separate returns, and is only available to spouses who are divorced, separated, or living apart. However, a claimant spouse cannot obtain separation of liability relief if the Secretary of the Treasury can prove the claimant had actual knowledge of "any item giving rise to a deficiency." Courts and the Department of the Treasury have interpreted this exception to refer to the transaction underlying a deficiency. In contrast, taxpayers and members of the Tax Section of the American Bar Association argue that this statutory language means an item on a joint return. This Comment examines the text, structure, and legislative history of § 6015(c), and concludes that there is strong support for the latter reading. Therefore, this Comment urges Congress and the Treasury to amend § 6015(c) and its implementing regulations to clarify Congress' intended meaning.

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