Internal Revenue Code:Sec. 66. Treatment of community income

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Contents


Location in Internal Revenue Code


     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle A - Income Taxes
       CHAPTER 1 - NORMAL TAXES AND SURTAXES
        Subchapter B - Computation of Taxable Income
         PART I - DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE
               INCOME, ETC.
        

Statute

    Sec. 66. Treatment of community income
 
    (a) Treatment of community income where spouses live apart
      If -
        (1) 2 individuals are married to each other at any time during
      a calendar year;
        (2) such individuals -
          (A) live apart at all times during the calendar year, and
          (B) do not file a joint return under section 6013 with each
        other for a taxable year beginning or ending in the calendar
        year;
        (3) one or both of such individuals have earned income for the
      calendar year which is community income; and
        (4) no portion of such earned income is transferred (directly
      or indirectly) between such individuals before the close of the
      calendar year,
    then, for purposes of this title, any community income of such
    individuals for the calendar year shall be treated in accordance
    with the rules provided by section 879(a).
    (b) Secretary may disregard community property laws where spouse
        not notified of community income
      The Secretary may disallow the benefits of any community property
    law to any taxpayer with respect to any income if such taxpayer
    acted as if solely entitled to such income and failed to notify the
    taxpayer's spouse before the due date (including extensions) for
    filing the return for the taxable year in which the income was
    derived of the nature and amount of such income.
    (c) Spouse relieved of liability in certain other cases
      Under regulations prescribed by the Secretary, if -
        (1) an individual does not file a joint return for any taxable
      year,
        (2) such individual does not include in gross income for such
      taxable year an item of community income properly includible
      therein which, in accordance with the rules contained in section
      879(a), would be treated as the income of the other spouse,
        (3) the individual establishes that he or she did not know of,
      and had no reason to know of, such item of community income, and
        (4) taking into account all facts and circumstances, it is
      inequitable to include such item of community income in such
      individual's gross income,
    then, for purposes of this title, such item of community income
    shall be included in the gross income of the other spouse (and not
    in the gross income of the individual).  Under procedures
    prescribed by the Secretary, if, taking into account all the facts
    and circumstances, it is inequitable to hold the individual liable
    for any unpaid tax or any deficiency (or any portion of either)
    attributable to any item for which relief is not available under
    the preceding sentence, the Secretary may relieve such individual
    of such liability.
    (d) Definitions
      For purposes of this section -
      (1) Earned income
        The term ''earned income'' has the meaning given to such term
      by section 911(d)(2).
      (2) Community income
        The term ''community income'' means income which, under
      applicable community property laws, is treated as community
      income.
      (3) Community property laws
        The term ''community property laws'' means the community
      property laws of a State, a foreign country, or a possession of
      the United States.
 

Sources

    (Added Pub. L. 96-605, title I, Sec. 101(a), Dec. 28, 1980, 94
    Stat. 3521; amended Pub. L. 98-369, div.  A, title IV, Sec.
    424(b)(1)-(2)(B), July 18, 1984, 98 Stat. 802, 803; Pub. L.
    101-239, title VII, Sec. 7841(d)(8), Dec. 19, 1989, 103 Stat. 2428;
    Pub. L. 105-206, title III, Sec. 3201(b), July 22, 1998, 112 Stat.
    739.)
 

Miscellaneous

                                 AMENDMENTS
      1998 - Subsec. (c). Pub. L. 105-206 inserted at end ''Under
    procedures prescribed by the Secretary, if, taking into account all
    the facts and circumstances, it is inequitable to hold the
    individual liable for any unpaid tax or any deficiency (or any
    portion of either) attributable to any item for which relief is not
    available under the preceding sentence, the Secretary may relieve
    such individual of such liability.''
      1989 - Subsec. (d)(1). Pub. L. 101-239 substituted ''section
    911(d)(2)'' for ''section 911(b)''.
      1984 - Pub. L. 98-369, Sec. 424(b)(2)(A), struck out ''where
    spouses live apart'' in section catchline.
      Subsec. (a). Pub. L. 98-369, Sec. 424(b)(2)(B), substituted
    ''Treatment of community income where spouses live apart'' for
    ''General rule'' in heading.
      Subsecs. (b) to (d). Pub. L. 98-369, Sec. 424(b)(1), added
    subsecs. (b) and (c) and redesignated former subsec. (b) as (d).
                      EFFECTIVE DATE OF 1998 AMENDMENT
      Amendment by Pub. L. 105-206 applicable to any liability for tax
    arising after July 22, 1998, and any liability for tax arising on
    or before such date but remaining unpaid as of such date, see
    section 3201(g)(1) of Pub. L. 105-206, set out as a note under
    section 6015 of this title.
                      EFFECTIVE DATE OF 1984 AMENDMENT
      Amendment by Pub. L. 98-369 applicable to all taxable years to
    which the Internal Revenue Code of 1986 (formerly I.R.C. 1954)
    applies with corresponding provisions deemed to be included in the
    Internal Revenue Code of 1939 and applicable to all taxable years
    to which such Code applies, except subsection (b) of this section
    is applicable to taxable years beginning after December 31, 1984,
    see section 424(c) of Pub. L. 98-369, set out as a note under
    section 6013 of this title.
                               EFFECTIVE DATE
      Section 101(c) of Pub. L. 96-605 provided that: ''The amendments
    made by this section (enacting this section) shall apply to
    calendar years beginning after December 31, 1980.''
 

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