Innocent spouse relief: liberalization of the lack of knowledge requirement.

Sec. 6013(d)(3) provides that "if a joint return is made, the tax shall be computed on the aggregate income and the liability with respect to the tax shall be joint and several. "Thus, the IRS can assess the full amount of the tax against both spouses together or either spouse individually, regardless of who actually generated the income.

Example 1: H and W, husband and wife, file a joint return. H neglects to report $20,000 of income he earned and $10,000 of income generated from his separate investment property. The tax deficiency from the $30,000 omission is $9,300. The IRS could assess the tax against both spouses or either spouse. If H has no assets to pay the tax, the IRS can assess the full amount against W.

This example illustrates how Sec. 6013(d)(3) can reach a nonoffending spouse for the deficiency of a guilty one. The section applies equally to community property and separate property states. Consequently, attribution of income from one spouse to another can be made for purposes of Sec. 6013(d)(3) in noncommunity property states.

The IRS can use its discretion as to which spouse it seeks to assess the tax against.(1) Moreover, the Service does not have to take into account the separate taxable income of each spouse when determining against whom to assess the tax.(2) Therefore, in Example 1, the full amount of tax could be assessed against the wife even if she had no income. The Service might do this if the wife had enough property to cover the deficiency and the husband had no assets that could be reached. Normally, however, the IRS will seek contribution from both spouses.

As can be seen, Sec. 6013(d)(3) can produce harsh results. However, joint and several liability is the price that must be paid for the tax advantage of filing a joint return. This article will illustrate that these unfavorable (and unfair) tax consequences can be avoided if the spouse seeking relief can show that she(3) is an innocent spouse. When the innocent spouse rules are met there is no joint or several liability. Rather, the full amount of the understated tax must be sought from the offending spouse. In Example 1, if the wife qualified as an innocent spouse, the $9,300 could be assessed only against the husband. Even when the understatement resulted from the sale of property belonging to the marital community, a spouse was able to obtain relief when she could show that her husband had complete control over the funds.(4)

It is important to note that innocent spouse relief is allowed only on the items that give rise to the tax understatement. Relief will not apply to nonunderstatement items.

Example 2: H and W, husband and wife, file a joint return. The return shows $100,000 of taxable income and a liability of $24,115 (1991 joint return rates). All of the income arises either from H's earnings or from his separate investment property. Only $14,115 of the tax has been paid when the joint return is filed and H fails to remit $10,000 with the tax return. A subsequent audit of the tax return discloses that H omitted $20,000 of his income. An additional $6,200 of tax is generated, exclusive of interest and penalties.

If W qualifies for relief as an innocent spouse, she can do so only for the $6,200 attributable to the omitted income. She will still be jointly and severally liable for amounts reported on the tax return and can be assessed for all or part of the $10,000 H failed to remit.

Sec. 6013(e)(5) applies the innocent spouse rules without regard to community property laws. Thus, a culpable spouse is separately liable for the entire community income earned by him and not reported on the tax return.

The Innocent Spouse Rules

The innocent spouse provisions of Sec. 6013(e) were enacted in 1971 and revised by the Deficit Reduction Act of 1984 (DRA). They allow a spouse to escape the tax consequences that may arise when the other spouse is solely responsible for a tax deficiency resulting from certain "erroneous items."

Four requirements must be met under Sec. 6013(e)(1) for a spouse to obtain relief. 1. A joint income tax return must be filed. 2. There must be a substantial understatement of tax attributable to grossly erroneous items of one spouse. 3. The spouse claiming relief must establish that in signing the return she did not know, and had no reason to know, of the substantial understatement. 4. Taking into account all of the facts and circumstances, it would be inequitable to hold the spouse seeking relief liable for the deficiency. The general measuring stick to determine such inequity has been the degree to which the spouse seeking relief benefited from the substantial understatement.(5)

For purposes of requirement 2, Sec. 6013(e)(2) defines a grossly erroneous item as any item of gross income attributable to an omission from gross income, and any claim for a deduction, credit or basis for which there is no basis in fact or law. If the understatement is from a gross income omission, it is only necessary for the tax that results from the omission to exceed $500.(6) However, if the understatement results from a claim of deduction, credit or basis for which there is no basis in fact or law, other requirements must be met - as defined in Sec. 6013(e)(4).(7)

It should be emphasized that all four requirements must be met for innocent spouse relief. Failing any of the four will result in disallowance of relief.(8) Also, the burden of proof is on the spouse claiming relief to prove each element.(9)

Lack of Knowledge Requirement

One commentator has noted that "[n]ot only is knowledge the most frequently litigated element of [the innocent spouse provisions], but it is often the crucial requirement upon which the fate of the spouse seeking relief rests."(10) Sec. 6013(e)(1)(c) provides that not only must the spouse seeking relief have no knowledge of the substantial understatement but also "had no reason to know. "Thus, a spouse could be liable under this section even without actual knowledge.

A recent case addressed the issue of whether a spouse who is knowledgeable about some of the income omitted on the tax return can be denied relief for that portion of which she was unaware. In Krause,(11) because the wife knew of "some" of the husband's embezzlement activities, the Tax Court found this amount of knowledge sufficient to deny innocent spouse relief for all amounts involved.

Lacking knowledge of the tax consequences of a substantial understatement will not satisfy the test. Rather, the taxpayer must show lack of knowledge of the transactions that gave rise to the understatement.(12) A taxpayer is presumed to have knowledge of the tax consequences, but not presumed to have knowledge of the transaction itself.(13) Thus, in a recent case in which the spouse was informed of her husband's embezzlement activities, the court rejected the argument that she should be afforded relief because she was unaware of the tax consequences of embezzlement.(14)

Since a spouse who admits to having knowledge would automatically be denied relief, the courts hearing innocent spouse cases usually must determine whether the taxpayer had "reason to know" of the substantial understatement. The standard that has been used by the courts is whether a reasonably prudent person in the taxpayer's position had reason to know or would be expected to know that the correct tax liabilities were underreported or that some further inquiry was warranted.(15)

In Stevens, the Eleventh Circuit listed four criteria, based on numerous prior cases, to determine whether a spouse had reason to know of the substantial understatement: (1) level of education, (2) involvement in the family's finances, (3) presence of expenditures that appear lavish or unusual when compared to the family's past level of income, standard of living and spending patterns; and (4) the culpable spouse's evasiveness and deceit concerning the family finances.(16)

The problem that will arise in the determination of knowledge is how much weight a court will attach to each of these four factors. Thus, should a spouse have reason to know of a substantial understatement if the other spouse is not evasive but she is not involved with the family finances? Or what about a well-educated spouse who is ignorant of the family finances? Generally, a court will focus on the totality of the circumstances to reach a decision.

When a spouse is deeply involved in family finances or the other spouse's business, knowledge will be presumed. In Frederick,(17) relief was denied to the wife because she had access to joint accounts and was heavily involved in all family finances. Also, the family's standard of living had improved while the tax return reported less income. Similarly, relief was denied to a spouse keeping the books for the spouse concealing income.(18) A spouse will have reason to know if she is in charge of the family finances and fully aware of the husband's business venture that was responsible for the substantial understatement.(19) The Tax Court denied relief to a spouse on determining that her occupation as a bank accounting clerk, coupled with the simplicity of the joint return, should have alerted her to the erroneous deductions taken by her husband.(20)

A spouse who is only marginally involved in the family finances will usually have the best chance of securing relief. Thus, a spouse who had access only to a checking account that was established for her by her husband and into which he deposited her monthly allowance had no reason to know of losses on a sham tax shelter.(21) In Whitten,(22) a spouse delivered packages with money to her husband. However, she was afforded relief by showing that she had no way of knowing the contents of the packages. Even a spouse who kept the books for her husband was found to have no reason to know because she was aware of only the limited information he gave her and she told the accountant preparing the return to contact her husband for more information. However, she was denied relief because she significantly benefited.(23)

Courts pay particular attention to any dramatic increase in the family's standard of living, as such an increase will usually serve to put a spouse on notice of additional income. The Tax Court has noted that while a spouse need not have "perfect knowledge of the family's finances ... she cannot close her eyes to unusual or lavish expenditures."(24) However, if it is reasonable for a spouse to believe that the money is borrowed, relief will be granted.(25) Also, if a family has always enjoyed a good lifestyle, the spouse seeking relief cannot be considered to have been put on notice of unreported income.(26) However, if the amount of income shown on the return cannot support an existing lifestyle, then relief will be denied. In Kistner,(27) the spouse had enjoyed a lavish lifestyle with her husband for many years. However, for the years at issue, she should have been alerted to a problem when the lifestyle continued and the tax return showed losses, even though she did not finish high school and was not significantly involved in the family's finances. Thus, the court held against Mrs. Kistner. Even when the lifestyle is not extravagant, the fact that family expenditures exceed gross income has been held to put a spouse on notice of income omissions.(28)

A spouse cannot lack knowledge about her own income. In Cerny,(29) the wife turned over property condemnation proceeds to her husband under his threat of violence. Nevertheless, she was still liable for the tax attributable to the amounts received by her and which were omitted by her husband on the tax return; she was not liable for his other omissions, however, because she had no reason to know.

Application to Erroneous Deductions

The problem that arose after the innocent spouse rules were amended in 1984 was how to apply knowledge to erroneous deductions. Because income omissions do not appear on the tax return, a spouse can more easily claim that she had no reason to know of the omission. However, deductions appear on the tax return. Therefore, it is more difficult to claim ignorance about a deduction. The mere fact that a spouse has signed the return can be interpreted as knowledge of erroneous deductions.

In Junker,(30) the Tax Court held against the spouse because she was aware that her husband was investing in a tax shelter. However, the court did not discuss whether she knew or had reason to know that the tax shelter was a sham. Similarly, in Levin,(31) the husband had discussed a sham tax shelter investment with his wife. Therefore, the court found the wife to have knowledge of the investment giving rise to the deductions even though it stated that she was not being charged with awareness that the investment was a "tax motivated transaction." The court stated that Mrs. Levin "had a duty to inquire with respect to the large deduction ... which was fully disclosed on the face of the return."(32) In fact, however, Mrs. Levin had visited a tax accountant who did not appear to have alerted her to any problems.

The problem of determining spousal knowledge of erroneous deductions was clearly evident in Cohen.(33) Janet Cohen's husband, a tax partner in a national CPA firm, had invested in a sham tax shelter. Mrs. Cohen testified before the Tax Court that she signed the return without question because her husband "was a partner in one of the largest accounting firms in the world. His attitude was, if he couldn't prepare a proper return, no one else could."(34) However, the court would not find lack of knowledge because the deduction was plainly visible on the face of the return and Mrs. Cohen "should have taken the time or effort to inquire, even if it would have meant pressing the issue with Mr. Cohen."(35)

The problem with the Levin and Cohen holdings is that the court never really defined the extent to which a spouse must inquire or whether, as in Cohen, there could be circumstances in which the spouse claiming relief is justified in relying on her husband's expertise.

In Bell,(36) the issue was whether the spouse claiming relief should have known of the erroneous nature of a $90,000 interest deduction taken by her husband. The Tax Court granted Mrs. Bell relief, finding that she had no business education or experience and did not participate in her husband's business. It also stated that even if she had examined and understood the return, she would not have been able to determine whether the interest expense was overstated. There was no evidence that Mrs. Bell ever inquired about the return; in fact, she seems not to have been aware of its contents.

The Bell court attempted to distinguish Mrs. Bell's situation from Janet Cohen's by stating that Mrs. Cohen had a college education and was a second grade teacher. However, Mrs. Bell also had a college education. But both women appeared to back any business education, and relied on their husbands' business expertise. The Bell court stated that Mrs. Cohen's husband was a CPA and appeared to be holding this against her, rather than allowing this. to be a mitigating factor justifying her reliance. Moreover, the Bell court did not mention that the size of the interest deduction that appeared on Schedule A should have led Mrs. Bell to inquire. Yet, in Levin, in which the wife had gone as far as contacting a tax accountant, the court stated that a spouse could not turn a "blind eye to ... facts fully disclosed on a return, of such a large nature as would reasonably put such spouse on notice that further inquiry would need to be made."(37) This stands in stark contrast to the Tax Court's position that Mrs. Bell could not have determined that the interest deduction was overstated. Her failure to examine the tax return was not found to be turning a "blind eye." In fact, the Bell court rejected the IRS'S view that Cohen established "as a rule of law that before signing a return a taxpayer is required in every case to make inquiry as to any possible understatement in order to satisfy the |reason to know' requirement ...."(38)

The Tax Court has not set any concrete safe harbor for lack of knowledge in deduction cases and, as shown above, is not always consistent in its rationale. However, the court seems to be most sympathetic to a spouse who devotes herself to full-time homemaking, has a limited education and is not involved in the family's finances.(39) Unlike the situation in which there are lavish expenditures resulting from gross income omissions that would alert a spouse to a substantial understatement, deductions are not as likely to lead to a better lifestyle. Therefore, in deduction cases, an increased living standard is less likely to indicate "reason to know."

Liberalization of the

Lack of Knowledge Requirement

The Tax Court's approach to knowledge of deductions was overturned by the Ninth Circuit in Price.(40) Patricia Price worked as a branch manager for a car pooling agency. Her husband, a stockbroker, acquired shares in a foreign gold mining operation. On the 1981 return there was a $90,000 deduction taken as a result of the mining investment. She questioned the deduction as being "a bit much" but received assurances from her husband about the legitimacy of the deduction. The Tax Court denied Mrs. Price relief because she was aware of the investment.

The Ninth Circuit stated that "[t]he plain meaning of the section is clear. It requires a spouse seeking relief to establish that she did not know and did not have reason to know that the deduction would give rise to a substantial understatement."(41) The court quoted from the legislative history accompanying the DRA changes (which had been ignored by the Tax Court), which stated that the spouse seeking relief must have "no reason to know that the deductions are phony ...."(42)

In a lengthy footnote, the Ninth Circuit stated that it would not follow the Tax Court's standard in deduction cases because the lower court had superimposed the standard developed in omission cases onto deduction cases (i.e., knowledge of the transaction which gives rise to an income omission is sufficient to deny relief). Following the Tax Court "would for the most part wipe out innocent spouse protection in" deduction cases. The court noted that it was considerably easier for a spouse to show lack of knowledge in an omission case. "But because deductions are necessarily recorded, any spouse who at least reads the joint return will be put on notice that some transaction allegedly has occurred to give rise to the deduction."(43) The court pointed out that in income omission cases "knowledge of the transaction is virtually equivalent to knowledge of the understatement because if a spouse knows of a transaction which generated income that the return does not report, then it is extremely likely that she will know that the return does not report all income ...."(44)

The Ninth Circuit's interpretation of Sec. 6013(e)(1)(C) - that the spouse "did not know, and had no reason to know" of the substantial understatement - is undoubtedly more in line with congressional intent than the Tax Court's narrow interpretation. However, it may be difficult to distinguish between this standard and allowing relief to a spouse because she does not know the tax consequences of a transaction. As was noted earlier,(45) the courts have consistently held that lack of knowledge of tax consequences does not satisfy the statute.

Quite possibly in anticipation of its opinion being read for the proposition that the lack of knowledge in deduction cases equates to lack of knowledge of the legal tax consequences, the Ninth Circuit followed previous legal rationale when it stated: "Obviously, the more a spouse knows about a transaction ... the more likely it is that she will know or have reason to know that the deduction arising from that transaction may not be valid. We merely conclude that standing by itself, such knowledge does not preclude relief."(46) Thus a spouse who is deeply involved in the other spouse's business affairs will be presumed to have knowledge. In this respect deduction cases will not differ from omission cases. The Price court also emphasized the spouse's duty of inquiring into the deduction.

The Eighth Circuit enunciated a similar standard in Erdahl.(47) Mrs. Erdahl was primarily a homemaker who was excluded from her husband's business affairs. Dr. Erdahl borrowed money from his corporation's pension plan to finance a partnership tax-sheltered investment. He claimed that he had discussed the investment and its alleged tax advantages with his wife on numerous occasions. He also testified that he went over the tax shelter deductions with his wife before filing the return to ensure that none had been omitted and explained to her that they were receiving a refund because of the tax shelter. The Tax Court denied Mrs. Erdahl relief because she knew or had reason to know of the underlying circumstances which gave rise to the disallowed losses."(48)

The Eighth Circuit held that the Tax Court had applied an erroneous standard. Mere knowledge of the investment did not support "the conclusion that Mrs. Erdahl knew or had reason to know the deduction of the partnership loss would give rise to a substantial understatement."(49) Knowledge of the investment was one of a number of circumstances to consider when determining overall knowledge. The standard adopted by the court asks whether "a reasonably prudent taxpayer under the circumstances of the spouse at the time of signing the return could be expected to know that the tax liability stated was erroneous or that further investigation was warranted."50 The court noted that the test it was adopting was no different from that adopted by the Ninth Circuit in Price and Eleventh Circuit in Stevens - the only other two circuits to decide knowledge cases within the context of deductions. The Eighth Circuit reversed the Tax Court on the knowledge issue and remanded the case to determine whether it would be inequitable to hold Mrs. Erdahl liable.

The Eleventh Circuit was the first appellate court to decide the knowledge issue within the context of deductions. In Stevens, it sought "[t]o determine whether the alleged innocent spouse, in signing the returns, knew or had reason to know that the returns contained phony deductions."(51) The court focused on whether "the spouse had sufficient knowledge of the facts underlying the claimed deductions such that a reasonably prudent person in the taxpayer's position would question seriously whether the deductions were phony."(52)

The Eleventh Circuit upheld the Tax Court's denial of relief to Mrs. Stevens, who had been a homemaker raising the children. However, she was also a secretary and bookkeeper for both of her husband's corporations as well as a corporate officer. She had unhindered access to all of the facts underlying the tax shelters and had been present on numerous occasions when her husband discussed the tax shelters with clients. Thus, Mrs. Stevens's involvement in her husband's business affairs was far more extensive than Patricia Price's or Gwen Erdahl's. Under the facts of Stevens, both the Eighth and Ninth Circuits probably would have denied relief.

The Stevens court cited the standard enunciated by the Fifth Circuit in Sanders, which has been followed in omission cases, that holds that a spouse has reason to know "if a reasonably prudent taxpayer under the circumstances of the spouse at the time of signing the return could be expected to know that the tax liability was erroneous or that further investigation was warranted."(53) In a footnote, the Eleventh Circuit stated that the same standard applies to both omission and deduction cases.(54) The Tax Court believed that the Eleventh Circuit had therefore, accepted the superimposition of the standard in omission cases onto deduction cases.(55) However, a better reading of Stevens would be that the Eleventh Circuit is merely acknowledging that the above cited language does not conflict with the standard that the spouse has no "reason to know that the return contained phony deductions" - a standard that was also adopted by the Stevens court. As previously noted, the Eighth Circuit adopted both standards in Erdahl and saw no conflict between them. The Eleventh Circuit did not hold that knowledge of the underlying transaction in a deduction case was sufficient to deny relief. Moreover, the Tax Court in Stevens did not mention that standard in its opinion.

Spousal Defenses

A spouse who learns of her husband's understatement after a joint return is filed will not be held to have knowledge. Sec. 6013(e)(1)(C) measures knowledge when the return is filed.

The most effective method a spouse has to prevent the IRS from assessing her for her husband's tax understatements is to file a separate return. Joint and several liability applies only to joint return filers.(56)

A spouse can assert the absence of a joint return if her signature on the tax return is obtained under duress. Thus, a wife was held not to have voluntarily signed the return when her husband was physically abusive whenever she questioned him.(57) Similarly, a joint return was not filed when a husband placed his hands around his wife's throat and told her to sign the return.(58) Duress has also been found when a spouse was threatened by her husband with separation from her children.(59)

It should be emphasized that if a spouse seeks to avoid joint and several liability by claiming duress, she must do so in a timely manner. Spouses who are late in raising this defense have not been granted relief.(60)

Conclusion

The lack of knowledge test as applied to erroneous deductions has been liberalized from the standard in omission cases at the appellate level. Knowledge of an income omission is sufficient to deny relief. However, knowledge of the transaction giving rise to the erroneous deduction is not, standing alone, sufficient to deny relief. Thus, the standard in omission cases will not be superimposed onto deduction cases.

The Eighth and Ninth Circuits have held that the test to be applied is whether the spouse seeking relief should have been aware that the deduction would give rise to a substantial understatement. Those two courts have rejected outright the idea that knowledge of the underlying transaction alone is sufficient to deny relief in deduction cases. The Eleventh Circuit's language that the proper test is to determine whether the taxpayer knew or had reason to know that the return "contained phony deductions" is the same as the tests adopted by the Eighth and Ninth Circuits.

However, a spouse will not be granted relief if she is heavily involved in the other spouse's business affairs and not excluded from obtaining the necessary information from her husband. Recently, the Tax Court denied relief to a spouse whose husband had taken erroneous deductions for his business.(61) Her responsibilities in his business included public relations, scheduling appointments, participating in the presentation of seminars, training others to give seminars, supervising clerical personnel and arranging entertainment for clients. The case was appealable to the Ninth Circuit. The Tax Court correctly concluded that even under the Ninth Circuit's Price criteria the spouse would be denied relief. However, the court cited the Golsen rule, which binds it to follow the opinion of the circuit court to which a case is appealable (here, the Ninth Circuit's Price decision). Thus, by invoking the Golsen rule, the Tax Court has indicated that it will not follow the standard accepted by three circuit courts that a spouse needs to show only that she had no reason to know the deduction would give rise to a substantial understatement of tax.

(1) Mary Ann Tavery, 897 F2d 1032 (10th Cir. 1990)(65 AFTR2d 90-626, 90-1 USTC [paragraph]50,121); Marie Dolan, 44 TC 420 (1965); Elizabeth N. Rude, 48 TC 165 (1967). (2) See Joseph L. Bingham, DC Conn., 1978 (41 AFTR2d 78-1123, 78-1 USTC [paragraph]9368), in which the court noted that the wife's "disclaimer of employment and earnings on her part is naturally irrelevant to her joint return liability for the other spouse's reported income - the sole source of the debt here claimed." At 78-1 USTC 83,870. (3) Although a number of innocent spouse cases involve the husband seeking relief, the vast majority of such cases concern the wife. (4)Edvige M. Busse, N.D. Ill., 1978 (41 AFTR2d 78-1191, 78-1 USTC [paragraph]9294). (5) Demetrios Votsis, TC Memo 1988-70. See also Joyce Purcell, 86 TC 228, 242 (1986); Philip D. Quint, TC Memo 1985-226; Jason R. Walker, TC Memo 1985-278. (6) Sec. 6013(e)(3) and (4)(E). (7) For an analysis and illustration, see Zimmerman, "Scope of innocent spouse rules narrowed by recent developments," 19 Taxation for Lawyers 96 (Sept./Oct. 1990). (8) Carolyn 1. Newton, TC Memo 1990-606; Howard B. Quinn, 524 F2d 617, 626 (7th Cir. 1975)(36 AFTR2d 75-6058, 75-2 USTC [paragraph]9764); Raymond H. Adams, 60 TC 300 (1973). (9) Rebecca C. Ratana, 662 F2d 220 (4th Cir. 1981)(48 AFTR2d 81-5894,81-2 USTC [paragraph]9691); Sally A. Shea, 78O F2d 561 (6th Cir. 1986)(57 AFTR2d 86-625, 86-1 USTC [paragraph]9150). (1O) Borison, "Innocent Spouse Relief: A Call for Legislative and Judicial Liberalization," 40 The Tax Lawyer 819, 830 (Summer 1987). (11) John E. Krause, TC Memo 1991-13. See also Lawrence I. Trimmer, TC Memo 1983-131. However, the situation would probably be different if the income omission involved two types of income (i.e., embezzlement income and unreported income from eamings). Also, if the understatement resulted from omitted income and erroneous deductions, a court would undoubtedly apply the knowledge test separately. See Carrilee A. Bell, TC Memo 1989-107. (12) The knowledge of the transaction approach has basically been a standard applied in income omission cases. Quinn, note 8. The standard has been modified by three appellate courts in deduction cases. See the discussion at notes 40-55. (13) Madeline M. Stevens, 872 F2d 1499 (11th Cir. 1989)(64 AFTR2d 89-5589, 89-1 USTC [paragraph]9330), aff'g TC Memo 1988-63. (14) Newton, note 8. (15) Bettye A. Sanders, 509 F2d 162 (5th Cir. 1975)(35 AFTR2d 75-935, 75-1 USTC [paragraph]9297), citing Restatement (Second) of Agency [section]9, Comment d (1958). Sanders is frequently cited in innocent spouse cases. The court rejected the IRS argument that lack of knowledge means that the spouse claiming relief must prove that she was "completely without fault and could not possibly have discovered the omission before executing the returns." At 75-1 USTC 86,645. (16) Stevens, note 13, at 89-1 USTC 87,850. See also Shea, note 9. (17) Maryann Frederick, TC Memo 1981-602. (18) Irene L. Griner, TC Memo 1990-301; Est. of Henry 1. Jackson, 72 TC 356 (1979); Brenda R. Sheckles, TC Memo 1984-289; Andrey Biller, TC Memo 1976-97. (19) Roberta H. Gorman, TC Memo 1986-344. (2O) Bonita Skelton, TC Memo 1988-136. (21) James Bouskos, TC Memo 1987-574. (22) F.O. Whitten, Jr., TC Memo 1980-245. (23) Monsita E. Quave, TC Memo 1985-7. (24) Patricia E. Mysse, 57 TC 680, 699 (1972). (25) Sandra Feingold, TC Memo 1980-163. (26) William S. Hagaman, TC Memo 1990-655; Dorothea M. Zinser, TC Memo 1978-256. (27) Lucille E. Kistner, TC Memo 1991-463. (28) Rita K. Ayer, TC Memo 1989-614. (29) Laverne Cerny, TC Memo 1987-599. The Tax Court has stated that even when a spouse signs a return under physical duress, "t[he] fact of her injury ... is [im]material to the question of whether she had actual knowledge ...." Jo Moonyeen Hodges, TC Memo 1986-67, at 86-257, n. 3. See also Peter F. Junker, TC Memo 1987-103. (30) Junker, id. (31) Sue S. Levin, TC Memo 1987-67. (32) Id., at 87-316. (33) Janet J. Cohen, TC Memo 1987-537. (34) Id., at 87-2900. (35) Id., at 87-2901. (36) Carrilee Bell, note 11. (37) Levin, note 31, at 87-316. (38) Bell, note 11, at 89-518. (39) See Edward Shapiro, TC Memo 1988-350; Robert M. McRae, TC Memo 1988-374; Bouskos, note 21. The wife was granted relief in all of these cases. Compare with Suzanne Edens, TC Memo 1992-686. One commentator has written: "There is an unmentioned but unmistakable reluctance to grant relief to a woman who is still married at the time of trial. There also seems to be an unspoken and probably unconscious preference for the dutiful and dependent wife in the traditional family, as opposed to the educated and successful married woman." (Footnote omitted.) Beck, "Looking For the Perfect Woman: The Innocent Spouse in the Tax Court," 15 The Review of Taxation of Individuals 3 (Winter 1991), at 5. (4O) Patricia A. Price, 887 F2d 959, 963, n. 9 (9th Cir. 1989)(64 AFTR2d 89-5822, 89-2 USTC [paragraph]9598), rev'g an unreported TC decision. (41) Id., at 89-2 USTC 89,829. (42) Id., at 89-2 USTC 89,830. (43) Id., at 89-2 USTC 89,829, n. 9. (44) Id. See also James A. Guth, 897 F2d 441 (9th Cir. 1990)(65 AFTR2d 90-657, 90-1 USTC [paragraph]150,133). (45) See note 13. (46) See note 43. (47) Gwen Erdahl, 930 F2d 585, n. 4 (8th Cir. 1991)(67 AFTR2d 91-790, 91-1 USTC [paragraph]150,184), rev'g and rem'g TC Memo 1990-101. (48) Id., TC, at 90-457. (49) Id., 8th Cir., at 91-1 USTC 87,762. (5O) Id., 8th Cir., at 91-1 USTC 87,762-87,763. (51) Stevens, note 13, 11th Cir., at 89-1 USTC 87,849. (52) Id., at 89-1 USTC 87,850. (53) Id., at 89-1 USTC 87,849. (54) Id., at 87-849-87,850, n. 8. (55) Richard D. Bokum II, 94 TC 126, 153 (1990). (56) However, in a community property state a spouse can be responsible for her share of her husband's omissions of community income even when separate returns are filed if she does not qualify as an innocent spouse. Sec. 66(c) offers some relief in this situation. See Zimmerman, "The DRA expands the innocent spouse provisions," 17 The Tax Adviser 294 (May 1986), at 299. (57) Lola I. Brown, 51 TC 116 (1968); Cecile Hansen, TC Memo 1976-84; Jean D. Pirnia, TC Memo 1990-444. (58) Paul 1. Frederick, TC Memo 1957-225. (59) Diane Stanley, 81 TC 634 (1983). (6O) Emily Bell, TC Memo 1984-235 (waited 10 years after the return was filed to assert duress); Barry P. Hershone, TC Memo 1984-199 (seven years); Jo Moonyeen Hodges, TC Memo 1985-56 (seven years); Marion Kramer, DC Md., 1983 (52 AFTR2d 83-5630, 83-2 USTC [paragraph] 9474) (appears to have waited 10-13 years). (61) Frieda A. Forest McReynolds, TC Memo 1991-210. See also Est. of James Durkin, Sr., TC Memo 1992-325. In Bokum, note 55, at 151, the Tax Court stated that it would not follow the Ninth Circuit in Price.