[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1682 Introduced in Senate (IS)]







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.

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

SECTION 1. REPEAL OF JOINT AND SEVERAL LIABILITY ON JOINT RETURNS.

    (a) In General.--Paragraph (3) of section 6013(d) of the Internal 
Revenue Code of 1986 (relating to special rules) is amended to read as 
follows:
            ``(3) if a joint return is made, the tax shall be computed 
        on the aggregate income, and liability for tax shall be 
        determined under subsection (e).''
    (b) Determination of Proportional or Separate Liability for Payment 
of Tax With Respect to Joint Returns.--Section 6013(e) of the Internal 
Revenue Code of 1986 (relating to spouse relieved of liability in 
certain cases) is amended to read as follows:
    ``(e) Liability for Payment of Tax With Respect to Joint Returns.--
When spouses elect to file a joint return for a taxable year, the 
liability for tax with respect to that year shall be determined as 
follows:
            ``(1) Tax reported on the return.--The liability for the 
        tax computed with respect to income and deductions as reported 
        on the return shall be in proportion to the tax liability which 
        each spouse would have incurred if each had reported his or her 
        apportionable items on a separate return of a married 
        individual, provided that a payment by one spouse in excess of 
        such spouse's proportionate share of liability for the tax 
        reported on the return shall not be refunded unless there is an 
        overpayment with respect to the return.
            ``(2) Liability for deficiencies imposed on the responsible 
        spouse.--Liability for a deficiency shall be imposed as 
        follows:
                    ``(A) With respect to an item of income, on the 
                individual spouse to whom the item is apportionable.
                    ``(B) With respect to an item of deduction, on the 
                individual spouse to whom the item is apportionable to 
                the extent that income apportioned to such spouse was 
                offset by the deduction.
        Liability for deficiency in excess of the amount allocated 
        under subparagraph (B) shall be imposed on the other spouse.
            ``(3) Apportionable items.--A taxpayer's apportionable 
        items shall be the taxpayer's share of the income and 
        deductions reportable on the joint return of the taxpayer and 
        his spouse, apportioned in the same manner as income and 
        deductions are apportioned under section 861 (determination of 
        income from sources within the United States). The Secretary 
        may prescribe regulations under which simplified apportionment 
        methods are authorized in making these determinations.''

SEC. 2. COMMUNITY PROPERTY LAWS DISREGARDED IN DETERMINING TAX 
              LIABILITY.

    (a) In General.--Section 66 of the Internal Revenue Code of 1986 
(relating to treatment of community income) is amended to read as 
follows:

``SEC. 66. COMMUNITY PROPERTY LAWS.

    ``(a) Tax Liability.--For the purpose of determining the tax 
liability of an individual under this chapter, community property laws 
shall be disregarded.
    ``(b) Attribution of Income and Deductions Under Community Property 
Law.--
            ``(1) In general.--For purposes of chapter 1, the income 
        and deductions of a taxpayer and his spouse under community 
        property law shall be allocated between the spouses under rules 
        similar to the allocation rules of section 879(a) (relating to 
        treatment of community income of nonresident alien 
        individuals).
            ``(2) Income derived from property allocated according to 
        title.--Notwithstanding paragraph (1), community income which 
        is derived from property shall be allocated in the same manner 
        as the spouses hold title to such property and not as provided 
        in paragraph (4) of section 879(a).''
    (b) Conforming Amendment.--The table of sections for part I of 
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 
amended by striking the item relating to section 66 and inserting:

                              ``Sec. 66. Community property laws.''

SEC. 3. EFFECTIVE DATE.

    The amendments made by this Act shall apply to taxable years 
beginning before, on, or after the date of the enactment of this Act.
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