Skip to Content

December 11, 2012


A Vivid Example of Why the Innocent Spouse Rule Exists

Marital harmony is never complete and betrayal takes many forms. Spouses often hide things from each other and let each other down in ways great and small. This inescapable reality is reflected a host of novels, movies and magazine articles – and even the federal tax code.

The IRS recognizes that there are times when one spouse should not be held fully liable for the other’s tax liability, even if the couple filed a joint return. The rule allowing for this is called the “innocent spouse” rule. It is sometimes involved in¬†tax litigation in Texas.

Normally, when couples file a joint return, both taxpayers are individually liable for the full amount of the tax and any tax penalties that may become due. This principle continues to apply even if the couple later divorce. And even if all of the income was earned by the other spouse.

The innocent spouse rule acknowledges that there are situations where holding a spouse to this standard simply wouldn’t be fair. Consider, for example, a scenario in which one spouse betrayed the other by embezzling virtually all of the marital property.

This is the scenario described by a recent essayist in the Huffington Post. The innocent spouse was a wife who went to graduate school in her 30s, got a job that paid well, and turned all of her money over to her husband to manage.

She thought he was investing it wisely. Instead, he was taking it and hiding much of it in accounts she didn’t even know about. He was also manipulating the balances of the couple’s joint accounts to conceal what was happening. Sadly, the marital home had become the center not of domestic bliss, but of a systematic forgery scheme.

A case like this is a poster-child illustration of why the innocent spouse rule exists. Uncle Sam should not inflict further harm on a spouse who has already been terribly wronged by his or her faithless partner.

Source: “It’s Not Fraud If You’re Married,” Huffington Post, Lisa Arends, 11-13-12
Additional source: “Introduction to Innocent Spouses,”

IRS Tax Collection