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Currently, Mr. Aude is financially stable. Through a
bankruptcy proceeding, he has been discharged of his obligation
on his tax liability.
OPINION
As a general rule, a husband and wife who file joint tax
returns are jointly and severally liable for Federal income tax
due on their combined incomes. Sec. 6013(d)(3); Guth v.
Commissioner, 897 F.2d 441, 442 (9th Cir. 1990), affg. T.C. Memo.
1987-522; Price v. Commissioner, 887 F.2d 959, 961 n.3 (9th Cir.
1989), revg. an Oral Opinion of this Court. However, section
6013(e)(3) mitigates this general rule to some extent. Guth v.
Commissioner, supra at 442-443; Price v. Commissioner, supra at
961.
For petitioner to qualify as an innocent spouse, she must
establish: (1) That a joint return was filed for each year in
issue; (2) that there were substantial understatements of tax
attributable to grossly erroneous items of the other spouse on
the return; (3) that, in signing the returns, she did not know or
have reason to know of the substantial understatements; and (4)
that taking into account all the facts and circumstances, it
would be inequitable to hold her liable for the deficiencies and
additions to tax. Sec. 6013(e)(1)(A) through (D)7; Guth v.
7 The current “innocent spouse” provisions were enacted as
part of the Deficit Reduction Act of 1984 (the Act), Pub. L. 98-
369, 98 Stat. 494, 801. Sec. 424(c) of the Act rendered the
amendments to sec. 6013(e) applicable to all taxable years to
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