James A. Guth, and Arlys M. Guth v. Commissioner of Internal Revenue

The government challenges the Tax Court’s determination that Arlys Guth was entitled to relief from tax liability under the tax code’s “innocent spouse” provision, 26 U.S.C. § 6013 (e) (1989). We affirm the Tax Court’s decision.

FACTS

Arlys Guth has only limited knowledge of financial matters. Arlys married James Guth in 1977. They were separated in 1982, and divorced in 1983. During the six years of their marriage, James Guth handled all the family’s finances. He controlled the joint checking account, paid all the bills, handled the credit cards, and prepared their joint income tax returns for the years at issue. Arlys never participated in the preparation of the returns or questioned their content; she signed the joint return because James told her to do so. James did not permit Arlys access to their money, did not give her an allowance, and required her to ask his permission before she made any purchase. Arlys only signed one check on their personal joint checking account during her entire marriage to James, and this occurred following their separation.

Shortly after his marriage to Arlys, James became active in the Universal Life Church, forming his own congregation (the…