Navigation Bar
Navigation Bar

  Michelle Singletary The Color of Money:
Read transcripts of live chats with personal finance writer Michelle Singletary plus an archive of past columns.

Jane Bryant Quinn Jane Bryant Quinn:
America's best-known personal finance expert Jane Bryant Quinn writes about retirement, health care and other topics.

Al Crenshaw Cash Flow: Albert B. Crenshaw covers taxes, investing and other personal finance matters.

James K. Glassman Investing:
James K. Glassman offers advice on stocks, bonds mutual funds and other investing vehicles.

Stan Hinden Retirement Journal:
Stan Hinden on retirement.
The Color of Money
A Break for 'Innocent Spouses': Wives Should Watch What They Sign

By Michelle Singletary
Washington Post Staff Writer
Sunday, January 17, 1999; Page H02

As part of its quest to be kinder and gentler, the Internal Revenue Service plans to lighten up on how it deals with "innocent spouses."

Great, but how do you legislate against hardheadedness?

Girlfriends, if I've told you once, I've told you a thousand times, look at what you sign.

But you're hardheaded.

Each year thousands of women find themselves liable for tax debts incurred by their ex-husbands. In most cases these women had let their husbands do the taxes and then had simply signed the tax form presented to them.

That may be okay if your man is honest and your marriage is strong. But what if he turns out to be a lying dog? Congress has finally recognized this problem. According to changes in the tax code passed last year, divorcing or legally separated spouses can choose to be held accountable only for taxes on their own income.

But what if you don't know that you're going to get divorced? That is where the innocent spouse provision kicks in. The new law considers you an innocent spouse if you "did not know, and had no reason to know" that your partner was a tax scofflaw. My question is, how do you prove a negative? How do you prove you did not know?

Even if you are keeping records that might help prove you didn't know your spouse was a cheat, it seems to me that the fact that you're keeping records suggests you must have suspected something. Besides, the IRS takes a dim view of people living large, then claiming they don't know the details of the family finances.

On the other hand, women who are truly innocent but are not keeping track of things often have only their word that they didn't know what their scoundrel of a husband was up to. (The husband is almost always the bum, though I grudgingly concede that a woman might be the guilty party on rare occasions.)

"If someone is in a divorce situation, it's a no-brainer they should file for the new election," said Jonathan Samel, a Philadelphia area tax attorney. "But let's say, for example, that you are not getting a divorce and you are living with your spouse. The IRS is going to say you should have known what was going on."

"The new law is just a little Band-Aid," said Elizabeth Cockrell, a New York stockbroker who has become one of the most outspoken advocates for innocent spouses. "Everybody knows how crazy the law still is. You still have to prove knowledge that you did not have. That's tough to do."

Cockrell ought to know. The IRS is pursuing her, a single mother of two, for a tax bill of $650,000. The tax liability is the result of a two-year marriage she was involved in when she 23 years old. Cockrell said her former husband was a commodities broker who created extremely complex tax shelters.

She found out years after the marriage ended that the deductions were not allowable. When the IRS couldn't collect from her husband, they came after her. Nine years after her divorce and after several hundred thousand dollars in legal bills later, Cockrell is still trying to prove she didn't know what her husband was up to.

Cockrell said she's just one example of the thousands of women who have lost homes, are having their wages garnisheed or have had to file for bankruptcy because they didn't know that their ex-husbands were cheating on their taxes.

"I just trusted him," Cockrell said. "He was my husband. What was I going to do, take apart everything he gave me? Was I supposed to say, 'Honey, are you sure these deductions are right?' "

Cockrell answered her own question. That's exactly what she said she should have done.

"If I ever get married again I'm filing my own taxes, even if it costs me more," she said, referring to the fact that married couples filing separately sometimes pay more in taxes.

"The lesson here is: For God's sake, ask," said Donald Alexander, a former IRS commissioner and now a Washington lawyer. "Don't sign without quizzing the person who is preparing the return. You don't want to get into trouble. Even winning is expensive."

A wife ought to be able to trust her husband. But there is nothing wrong with, shall we say, checking his math. All this comes down to something my grandmother used to say, "A hard head makes for a soft behind."

What did she mean?

She meant that if you continue to be hardheaded you're going to pay dearly for it in the end.

Michelle Singletary's column appears in this section every Sunday. She will be talking about this column Wednesday on the "Insight" program with Herman Washington at 6:40 p.m. on WHUR (96.3-FM). Her e-mail address is She can also be reached at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.


It's time for the second annual "Honey, I Need Some Money!" contest.

Last year's winning couple have reported they are living happily ever after in financial bliss after telling me their story. So now it's your chance to enter.

Write and tell me about the funny or frustrating ways you and your partner handle your finances.

Entries may be used in an upcoming column, so they should be brief and suitable for print (in other words, nothing that's going to wind up as evidence in divorce court).

Send in your entries by Feb. 5, and please include your address and daytime and evening phone numbers.

Winners will get a free financial consultation with a professional financial planner.

Entries should be mail to the "Honey, I Need Some Money" Contest, Michelle Singletary, The Washington Post, 1150 15th St. NW, Washington, D.C. 20071. You can also send your entry via e-mail to

© Copyright 1999 The Washington Post Company

Back to the top

Navigation Bar
Navigation Bar