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property State has a vested interest in, and is owner of, one-half
of the spouses’ community property. United States v. Mitchell,
403 U.S. 190, 196 (1971). Generally, spouses residing in a
community property State are liable for the Federal income tax on
one-half of their community income. Id. Income and deductions
attributable to community property are also community property.
See Tex. Fam. Code Ann. secs. 3.001 and 3.002; Adams v.
Commissioner, 82 T.C. 563, 567-568 (1984); Hockaday v.
Commissioner, 22 T.C. 1327, 1329 (1954); Harris v. Harris, 765
S.W.2d 798, 802 (Tex. App. 1989); Marshall v. Marshall, 735 S.W.2d
587, 594 (Tex. App. 1987).
Spouses who reside in a community property State may file
either a joint Federal income tax return or separate Federal
income tax returns. If they file separate returns, then
generally each spouse must report, and pay tax on, one-half of the
community income, regardless of whether the spouse actually
received that income. United States v. Mitchell, supra at 196-
197; Bernal v. Commissioner, 120 T.C. 102, 105-106 (2003).
Under certain circumstances, section 66 provides that a
taxpayer may be relieved of liability on community income.
Section 66(a) addresses the treatment of community income in the
case of spouses who live apart at all times during the calendar
year. Section 66(b) allows the Secretary to disallow the benefits
of community property laws if the taxpayer acted as if he or she
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