Date of Award

Fall 2009

Document Type


Degree Name

Doctor of Business Administration (DBA)


School of Accountancy

First Advisor

Ted D. Englebrecht


The purpose of this dissertation is to ascertain taxpayers' perceptions of joint and several liability and equitable relief. Congress was aware that joint and several liability is not always fair when they passed the first innocent spouse provisions in 1971. In fiscal years 1999-2001, over 152,000 requests were filed for relief from joint and several liability, and it remains one of the top ten most litigated tax issues. The innocent spouse rules were passed to protect the public, and it is important that we understand how ordinary taxpayers feel about this area of the tax code.

For this study, an internet survey company distributes the questionnaire to a representative sample of the nation's taxpayers. The fairness of joint and several liability is addressed along with the importance of various factors the Internal Revenue Service (IRS) uses in determining who receives equitable relief. A scenario based on an actual case is presented to the participants who assess the importance of the factors in the case and they decide if the individual should receive equitable relief. Two versions of the survey are distributed; the only difference between the two is the gender of the petitioner for equitable relief.

Results show that the participants' beliefs regarding the fairness of the overall tax system affect their views on the fairness of joint and several liability; however, marital status, gender of the study participant, and whether the individual has been divorced do not influence beliefs on this issue. When studying the importance of the threshold requirements needed to qualify for equitable relief and the factors the IRS uses in determining equitable relief, the results indicate that knowledge of an error on the return and current compliance with the federal tax laws are deemed to be more important than the threshold conditions. In addition, gender has a significant affect on the perceived importance of these variables. When a scenario based on an actual case is presented, the importance ratings on some of these variables change suggesting that each individual case is subjectively analyzed to determine the significance of every individual factor in the case. Using an ordered logit model with denying or granting equitable relief as the dependent variable, the importance of the following factors is significantly related to the decision to deny or grant equitable relief at the 5% level of significance: abuse, benefit, knowledge the tax would be paid, hardship, and other spouse has the legal obligation to pay the tax liability. The perceived importance of tax factors, that is, tax attributable to the other spouse and current compliance with federal tax law, is significantly related to denying or granting equitable relief at the 10% level of significance. In addition, there is a significant interaction between the gender of study participant and gender of the petitioner requesting equitable relief.

Overall, the findings suggest that the process of deciding who receives equitable relief is subjective. The decision is affected by the importance placed on many factors that the IRS uses in determining equitable relief and the interaction between the gender of the petitioner and the gender of the study participant. Furthermore, participants are overwhelmingly supportive of eliminating joint and several liability from the tax code.

Included in

Accounting Commons