NCPA - National Center for Policy Analysis

"Innocent Spouses" Deluge IRS With Claims

August 25, 2000

Two years ago, Congress passed a law making it easier for taxpayers to get off the hook for the tax debts of their spouses or ex-spouses. Since then hordes of innocent spouses -- most of them women -- have been stepping forward.

  • At last count, 85,782 had filed claims with the Internal Revenue Service.
  • So far, only about 17 percent of the claims have been granted.
  • Another 44 percent are caught in the backlog and 39 percent have been disqualified for some reason or denied outright.
  • Although relief is only available to spouses who filed joint returns, more than one-third of the claims IRS threw out came from people who had filed separately.

Joint returns signed under duress aren't valid. On the other hand, even if an "innocent" spouse's signature isn't at the bottom of a joint return, she may be treated as if having filed one if she gave what the courts call "tacit consent."

The protesting wife must prove, among other things, that her spouse did all the cheating, that she did not know about it, and that she had no reason to know about it.

Some divorce lawyers are urging clients to file claims automatically -- whether or not any cheating is expected. But experts see that as a dangerous move. It could trigger a tax audit.

Source: Carolyn T. Geer, "Getting a Fair Shake," Fortune, September 4, 2000.


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