Seventh Circuit Does Not Hear ‘Audible Silence’

Innocent Spouses Must Comply with Two-Year Deadline

Eric Smith, JD, LLM

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.