Thursday, May 24, 2012
Stephanie Hunter McMahon (Cincinnati) kicked off our 16th Annual Summer Faculty Workshop Series yesterday with a wonderful presentation of her latest paper, What Innocent Spouse Relief Says About Women and Why We Need a New Rule for Joint and Several Tax Liability:
Every time spouses sign joint returns, they accept joint and several liability. Therefore, each spouse is liable for all of the tax due on income reported, or failed to be reported, on the joint return unless he or she can claim relief. One form of relief targeted specifically to filers of joint returns is innocent spouse relief that relieves a spouse of liability under one of three vague standards. Joint and several liability’s efficient tax collection often conflicts with innocent spouse’s equitable claims to have signed the return while being lied to, abused, or manipulated. The question for Congress is how to balance these competing claims. Located at the intersection of the public-market / private-family divide, innocent spouse relief offers an opportunity to explore how the government views women. Currently, the relief provided is both over- and under-inclusive by not offering relief to all wives who are unable to assess the validity of their returns but offering relief to some who both know and help orchestrate the evasion. This paper argues, instead, that the IRS should respect wives’ autonomy when signing the return and grant relief only when a wife was unable to exercise that autonomy. Therefore, in the event that a spouse is abused or deceived, relief needs to be more automatic that under today’s law to reduce the administrative costs on both taxpayer and the government.
This paper follows up on Stephanie's prior work, including: