For every spouse who has signed a tax return without knowing what's in it: a new court case gives you a little more hope if the IRS comes calling about taxes owed.
At issue is the land mine otherwise known as the joint tax return. Typically, one spouse prepares it, or it's done by an accountant with that spouse's input. The other spouse smiles and signs.
That signature makes you both liable for the full tax, even if you're a homemaker with no income of your own.
A land-mine return might not report all your taxable income for that year. Or it might take larger deductions than you're entitled to.
If the tax return explodes in your face and your spouse skips out, the IRS will come after you. It can take everything you have.
Sometimes husbands innocently sign bad returns prepared by their wives, who have businesses they don't understand.
But at present, this is mostly a women's issue, says certified public accountant Ed Slott of Rockville Centre, N.Y., author of "Your Tax Questions Answered" (Plymouth Press; $9.95).
Ask Helene Mester -- formerly a homemaker, now a social worker -- who is trying to rebuild her life.
While getting divorced from her husband of 25 years, she learned he was being assessed for more than $1 million for tax shelters that were disallowed.
His business had gone bankrupt and he had vanished, she says. She knew nothing about the shelters. She had temporarily leased her house, in a ritzy section of New York State, while she pursued work in Florida.
Everything snowballed. The IRS took her bank account, retirement account and the college account she kept for the children. It seized and sold her house.
Her credit history was a mess, which made it hard for her to enter a professional partnership, rent an office or even get a job. "I was a good mother and wife and I lost my whole life," she told my associate, Kate O'Brien Ahlers.
There's an IRS regulation known as "innocent spouse." It says that one spouse won't be liable for the tax mistakes of the other, if he or she meets certain conditions.
But the conditions are so tough that few spouses qualify. Spouses like Mrs. Mester, who perhaps had a case, can't even afford to pursue them. "There's no Legal Aid for IRS suits," Mrs. Mester says.
Rebecca Jo Reser was luckier -- if "lucky" can ever be used in cases of this sort.
She's a lawyer who was pouring money into her husband's new real estate business in San Antonio, Texas. They took nearly $600,000 in losses on their joint tax return.
But because of an error in the way her husband structured his business, the IRS ruled that the losses didn't belong on their personal return.
They divorced. The Tax Court ordered Mrs. Reser to pay back taxes and penalties. She won on appeal, as an innocent spouse who had no reason to believe that the deductions weren't legitimate.
Two things make this case important, Slott says. First, it shows that courts are getting a bit more reasonable.
Typically, judges have said that you can't be "innocent" about any item that appears on the return. But at least 19 states -- now including Texas -- let you claim innocence if you had no reason to know the deduction wasn't legitimate.
Second, the court accepted the fact that even a professional person can be innocent about taxes.
"Ten years ago, I would have told Mrs. Reser 'no hope'," says attorney Paige Marvel of Venable, Baetjer & Howard in Baltimore. "There's a feeling that educated people should know better, even though they have no reason to know about taxes."
Even so, an innocent spouse is more likely to wind up like Mrs. Mester than Mrs. Reser. The IRS pursues virtually every case and often appeals when it loses. Litigation is expensive. Spouses usually settle, or lose.
Mrs. Reser would have lost if the court found she'd had any reason to think something might be wrong.
The Treasury has been studying the fairness of the innocent-spouse rules for more than a year, with no result yet.
If you're having marital problems and your spouse owns rental real estate or a business, Slott suggests that you ask another accountant to review the return. You might even file separately.
If you want to fight, grill the lawyer you hire. Has he or she won cases like yours in Tax Court and on appeal? What cases? If the lawyer doesn't have serious credentials, you're throwing your money away.