II

105TH CONGRESS

2D SESSION S. 1682

To amend the Internal Revenue Code of 1986 to repeal joint and several

liability of spouses on joint returns of Federal income tax, and for

other purposes.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 26, 1998

Mr. D’AMATO (for himself, Mr. GRAHAM, Mr. ABRAHAM, Mr. MOYNIHAN, Mr.

BIDEN, and Mr. INHOFE) introduced the following bill; which was read

twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to repeal

joint and several liability of spouses on joint returns

of Federal income tax, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. REPEAL OF JOINT AND SEVERAL LIABILITY ON

4 JOINT RETURNS.

5 (a) IN GENERAL.—Paragraph (3) of section 6013(d)

6 of the Internal Revenue Code of 1986 (relating to special

7 rules) is amended to read as follows:
2

•S 1682 IS

1 ‘‘(3) if a joint return is made, the tax shall be

2 computed on the aggregate income, and liability for

3 tax shall be determined under subsection (e).’’

4 (b) DETERMINATION OF PROPORTIONAL OR SEPA5 RATE LIABILITY FOR PAYMENT OF TAX WITH RESPECT

6 TO JOINT RETURNS.—Section 6013(e) of the Internal

7 Revenue Code of 1986 (relating to spouse relieved of liabil8 ity in certain cases) is amended to read as follows:

9 ‘‘(e) LIABILITY FOR PAYMENT OF TAX WITH RE10 SPECT TO JOINT RETURNS.—When spouses elect to file

11 a joint return for a taxable year, the liability for tax with

12 respect to that year shall be determined as follows:

13 ‘‘(1) TAX REPORTED ON THE RETURN.—The li14 ability for the tax computed with respect to income

15 and deductions as reported on the return shall be in

16 proportion to the tax liability which each spouse

17 would have incurred if each had reported his or her

18 apportionable items on a separate return of a mar19 ried individual, provided that a payment by one

20 spouse in excess of such spouse’s proportionate

21 share of liability for the tax reported on the return

22 shall not be refunded unless there is an overpayment

23 with respect to the return.
3

•S 1682 IS

1 ‘‘(2) LIABILITY FOR DEFICIENCIES IMPOSED ON

2 THE RESPONSIBLE SPOUSE.—Liability for a defi3 ciency shall be imposed as follows:

4 ‘‘(A) With respect to an item of income, on

5 the individual spouse to whom the item is

6 apportionable.

7 ‘‘(B) With respect to an item of deduction,

8 on the individual spouse to whom the item is

9 apportionable to the extent that income appor10 tioned to such spouse was offset by the deduc11 tion.

12 Liability for deficiency in excess of the amount allo13 cated under subparagraph (B) shall be imposed on

14 the other spouse.

15 ‘‘(3) APPORTIONABLE ITEMS.—A taxpayer’s

16 apportionable items shall be the taxpayer’s share of

17 the income and deductions reportable on the joint

18 return of the taxpayer and his spouse, apportioned

19 in the same manner as income and deductions are

20 apportioned under section 861 (determination of in21 come from sources within the United States). The

22 Secretary may prescribe regulations under which

23 simplified apportionment methods are authorized in

24 making these determinations.’’
4

•S 1682 IS

1 SEC. 2. COMMUNITY PROPERTY LAWS DISREGARDED IN

2 DETERMINING TAX LIABILITY.

3 (a) IN GENERAL.—Section 66 of the Internal Reve4 nue Code of 1986 (relating to treatment of community in5 come) is amended to read as follows:

6 ‘‘SEC. 66. COMMUNITY PROPERTY LAWS.

7 ‘‘(a) TAX LIABILITY.—For the purpose of determin8 ing the tax liability of an individual under this chapter,

9 community property laws shall be disregarded.

10 ‘‘(b) ATTRIBUTION OF INCOME AND DEDUCTIONS

11 UNDER COMMUNITY PROPERTY LAW.—

12 ‘‘(1) IN GENERAL.—For purposes of chapter 1,

13 the income and deductions of a taxpayer and his

14 spouse under community property law shall be allo15 cated between the spouses under rules similar to the

16 allocation rules of section 879(a) (relating to treat17 ment of community income of nonresident alien indi18 viduals).

19 ‘‘(2) INCOME DERIVED FROM PROPERTY ALLO20 CATED ACCORDING TO TITLE.—Notwithstanding

21 paragraph (1), community income which is derived

22 from property shall be allocated in the same manner

23 as the spouses hold title to such property and not

24 as provided in paragraph (4) of section 879(a).’’

25 (b) CONFORMING AMENDMENT.—The table of sec26 tions for part I of subchapter B of chapter 1 of the Inter-
5

•S 1682 IS

1 nal Revenue Code of 1986 is amended by striking the item

2 relating to section 66 and inserting:

‘‘Sec. 66. Community property laws.’’

3 SEC. 3. EFFECTIVE DATE.

4 The amendments made by this Act shall apply to tax5 able years beginning before, on, or after the date of the

6 enactment of this Act.

Æ