It is an area where there has been a substantial amount of litigation, and it appears that Congress has not solved all of the inequities in the 1984 revisions. The specific facts and circumtances of each case are critical. Proper cross indemnification agreements are a necessity for parties filing jointly in a matrimonial proceeding. It may be several years after the divorce that the parties become aware of their tax problems. Careful thought and planning must be given to the filing of a joint return during a matrimonial proceeding.
Many attorneys require accountants to closely scrutinize each item on a proposed joint return.
When the return look questionable or where unsatisfactory or no responses are received to inquires as to the substantiation for transactions and entries on the return, or one spouse is involved in possible illegal activities, good advice suggests that separate returns be filed. This will avoid the rather burdensome task of litigating an innocent spouse case.