New Developments in Innocent Spouse Rules‪.‬

ABSTRACT Both spouses are usually liable for taxes owed to the IRS on a joint tax return. However, the "innocent spouse doctrine" offers relief to a spouse when it would be inequitable to hold that spouse liable for taxes created by the other spouse. The innocent spouse laws have gone through numerous changes over the years and Congress made a major revision to the law in 1998. The revised law has made it easier to obtain innocent spouse relief when inequitable situations arise. This article traces the development of the innocent spouse provisions in the literature with emphasis on the legislative history. The article then explains the current innocent spouse rules and discusses the implications of Code Section 6015. Finally, the article summarizes new developments in the innocent spouse provisions with particular emphasis on a recent Tax Court decision in 2006 that deals with innocent spouse rules in community property states.