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Ms. Dawson was sentenced to 28 months’ incarceration in
Federal prison. At the time of trial, Ms. Dawson was on
supervised release from Federal prison. She was ordered by the
District Court to pay, and, at the time of trial, she was paying,
(1) restitution to Dr. Constant and (2) taxes to the Internal
Revenue Service (IRS) for 1988 in accordance with a payment
schedule developed with the IRS.
OPINION
Innocent Spouse Issue
The first issue that we must consider is whether petitioner
has shown that he is an innocent spouse with respect to the
understatement of tax attributable to the funds embezzled by Ms.
Dawson in 1988.
Spouses who file joint tax returns generally are jointly and
severally liable for Federal income tax due on their combined
incomes, as well as for interest on, and additions to, the tax.
Sec. 6013(d)(3); Park v. Commissioner, 25 F.3d 1289, 1292 (5th
Cir. 1994), affg. T.C. Memo. 1993-252. The general rule is
mitigated to some extent by section 6013(e), known as the
“innocent spouse” rule. Park v. Commissioner, supra. Congress
regards joint and several liability as an important adjunct to
the privilege of filing joint tax returns, which generally
results in a lower tax on the combined incomes of spouses than
would be due were they to file separate returns, and any
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