Originally published on Passive Activities and Other Oxymorons on January 3rd, 2011.
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CCA 201050029
I’m doing this one as a bonus post. I have written several times on the perils of filing joint returns. I have long been of the opinion that divorcing spouse in particular should reflect on the perils of joint and several liability rather than just looking at the relative tax amounts. Several months ago I made a logical extension of that advice. In my post on the Laura Brady case, I recommended that a spouse who has decided not to sign a joint return should file a separate return, even if not otherwise required to file. This is because a non-signing spouse can be deemed to have consented to a joint return.
CCA 201050029 illustrates the dilemmas that can be created by not paying attention. The Chief Counsel has to ponder whether someone should be informed about the contents of a joint return that he or she has denied signing. Seem like it would be nice to know how much your ex is trying to hang you with. I’ve read the thing a couple of times and am still not sure what the answer is. Better to avoid the situation entirely.
From: ————————— Sent: Friday, November 05, 2010 9:50:31 AM To: ——————— Cc:
Subject: Your Inquiry
As a starting point, sections 6103(e)(1)(B) and 6103(e)(7) authorize the disclosure of a joint return, and return information relating thereto, to either of the “individuals with respect to whom the return is filed.” Your question concerns whether that authority remains viable when one such individual claims not to have signed the purported joint return. I believe it does; because there has been no final determination as to the spouse’s tax liability stemming from the purported joint return, the spouse remains an “individual with respect to whom the return is filed.”
But there may be other authority as well. You can look to section 6103(h)(4). (Note that there is some overlap between the authorities in sections 6103(e) and (h) with respect to a taxpayer’s ability to access his or her own information.) Section 6103(h)(4) establishes disclosure authority in “administrative and judicial proceedings pertaining to tax administration,” which include examinations and Appeals consideration. Subsections (A), (B), and (C) set forth the relevant authority for disclosure of return and return information to a taxpayer, either where that taxpayer is a “party to the proceeding” or the “proceeding arose out of, or in connection with, determining the taxpayer’s liability” , or where either of the third party tests apply. As noted above, because there has been no final determination as to the spouse’s tax liability stemming from the purported joint return, it strikes me that the spouse remains a party to the matter that is before Appeals. Alternatively, depending on the particular facts, one or more of these other subparts may apply