- 13 - 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 anyPage: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
Last modified: May 25, 2011