When spouses file joint New York Personal Income Tax Returns, they are jointly and severally liable for the entire tax due, regardless of which spouse earned the income.1 In general this is appropriate, since both spouses benefit from the income earned and it would often be difficult to prevent spouses from transferring assets between themselves to avoid paying tax. Nevertheless, there are circumstances when requiring both spouses to be liable for tax manifests injustice.
As a remedial measure, New York has a so-called “innocent spouse” rule (incorporating an analogous federal provision) to relieve certain taxpayers from their spouse’s adverse tax consequences.2 The recent administrative law judge determination in Peter Gerace, Sr.3 is a demonstration of the utility of this rule for the equitable administration of tax.
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