What is the impact of the Community Property Laws on a taxpayer’s Offer?

In the United States there are two basic types of property law: community property (which 9 states have adopted) and separate property (adopted by 41 states).
Federal law determines how property is taxed, but state law determines whether, and to what extent, a taxpayer has \”property\” or \”rights to property\” subject to taxation. What this means is that for IRS Collection efforts, the federal tax is assessed and collected based upon a taxpayer\’s state-created rights and interest in property.
In the 41 separate property states, taxpayers who file as \”Married Filing Separately\” (\”MFS\”) can avoid dragging their spouse (and their spouse\’s assets and income) into their IRS morass.
In community property states, however, the laws can have an impact on IRS collection when spouses file MFS. In a community property state the married filing separate spouse is taxed on 50% of the community property income regardless of who acquired it and then taxed on 100% of his or her separate property income.
Because a federal tax lien against one spouse attaches to \”all of the taxpayer\’s property and rights to property,\” in a community property state the lien would attach to the liable spouse\’s one-half ownership interest in all items of community property (ie. Those held by their spouse). Therefore the spouse\’s assets would be considered available for IRS Collection and includible in an Offer.