Marriage, Annullment And Gifts

#30 06-02-2006, 06:53 AM

Phil -- Another thought. If, as you advocated, the
original giftee returned the gifts, would not that person
also have to report having made gifts?

Yikes! Now I have caused two innocent people much trouble.<g
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#29 03-01-2006, 07:37 AM

"Katie" <katiej_1958[at]yahoo.com> wrote:
- quote -

> Dick Adams wrote:

> > There is an interesting problem with bigamy. It's called a
> > statute of limitations after which criminal charges cannot
> > be filed.

> But wouldn't a bigamous marriage be a continuing crime? So
> the SOL would not start to run until the relationship had
> terminated?

Perhaps. But that would just mean that the statute of
limitations on the crime of bigamy itself would not expire.
But that wouldn't extend the statute of limitations for
other issues, simply because they are related to the
bigamous marriage.

Stu

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#28 02-28-2006, 05:10 AM

Dick Adams wrote:

- quote -

> Katie wrote:

> > I wonder if state law might enter into it. In California, a
> > marriage may be determined to be void (e.g., due to
> > consanguinity or known bigamy) or voidable (e.g., entered
> > into through fraud, coercion, with an underage person,
> > bigamy where the first spouse was reasonably believed to be
> > deceased, etc.). In either case, if one or both parties are
> > found to have believed in good faith that the marriage was
> > valid, that party or parties are treated for purposes of
> > division of property as "putative spouses" and the same
> > rules apply to them that would apply if the marriage had
> > been valid. California Family Code Secs. 2200-01, 2210,
> > 2251.
> > > If one or both parties are putative spouses at the time of
> > the gift, would the gift qualify for the marital deduction?

> My answer is yes.
> There is an interesting problem with bigamy. It's called a
> statute of limitations after which criminal charges cannot
> be filed.

But wouldn't a bigamous marriage be a continuing crime? So
the SOL would not start to run until the relationship had
terminated?

Just curious ...

Katie

==========
Moderator:
My thought too, but I researched it for a friend of mine
a few years ago and it is the act for which the bekk tolls,

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#27 02-27-2006, 10:07 PM

Katie wrote:

- quote -

> I wonder if state law might enter into it. In California, a
> marriage may be determined to be void (e.g., due to
> consanguinity or known bigamy) or voidable (e.g., entered
> into through fraud, coercion, with an underage person,
> bigamy where the first spouse was reasonably believed to be
> deceased, etc.). In either case, if one or both parties are
> found to have believed in good faith that the marriage was
> valid, that party or parties are treated for purposes of
> division of property as "putative spouses" and the same
> rules apply to them that would apply if the marriage had
> been valid. California Family Code Secs. 2200-01, 2210,
> 2251.
> If one or both parties are putative spouses at the time of
> the gift, would the gift qualify for the marital deduction?

My answer is yes.

There is an interesting problem with bigamy. It's called a
statute of limitations after which criminal charges cannot
be filed.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

#26 02-27-2006, 10:07 PM

- quote -

> I wonder if state law might enter into it. In California, a
> marriage may be determined to be void (e.g., due to
> consanguinity or known bigamy) or voidable (e.g., entered
> into through fraud, coercion, with an underage person,
> bigamy where the first spouse was reasonably believed to be
> deceased, etc.). In either case, if one or both parties are
> found to have believed in good faith that the marriage was
> valid, that party or parties are treated for purposes of
> division of property as "putative spouses" and the same
> rules apply to them that would apply if the marriage had
> been valid. California Family Code Secs. 2200-01, 2210,
> 2251.
> If one or both parties are putative spouses at the time of
> the gift, would the gift qualify for the marital deduction?
> The tax law says only that the parties must have been
> legally married at the date of the gift.
> An interesting question ...

Let me tell you how it really works, having lived through it
in person. Soap opera to follow:

In February 1971 I contracted an alleged marriage with a man
who supposedly was divorced from his first and only wife.
Several years later I found out that he had lied to me about
some significant things. I filed for annulment on the
grounds of fraud. Three months later my attorney found out
that he had never been divorced from the first wife. They
were merely separated. She had meanwhile gone on to marry
some other guy who was later vegitated in a car crash and on
life support........ but that's for another episode.

At about this time the Fraud (this is better than #$%[at]#$%ed
#%$#$$%er) meets his next victim and 5 months later runs off
to Las Vegas and "marries" her. I suppose he assumed that
our "marriage" was over when the property settlement was
arrranged. Three months later he picks up his papers and
the annulment is final. Whew! I'm outta here.

I filed that year as single. I amended the previous three
years to single from MFJ. I let the other years alone . We
used the Marvin case as a precedent to the property
settlement. We each kept our own separate retirement
benefits. I got my refunds from the amendments. IRS never
remarked on the situation, never asked for more amendments,
and from what I heard, never came back at him for anything.
He is now on his 5th or 6th victim and probably still has
never divorced his wife.

On our next show, we will see Fraud make more false promises
to the next victim causing her to lose both her children and
move 60 miles further away from her old job.....

Linda Dorfmont E.A., CFP, CSA

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#25 02-14-2006, 05:06 AM

L K Williams wrote:
- quote -

> Harlan Lunsford <hlunsford[at]bellsouth.net> wrote:
> > Seth Breidbart wrote:

> > > In any case, you _can't_ amend a 10-year-old return. The
> > > question I had is about the 2.9-year-old return; what if
> > > they wait 2 months, and then they can't amend it?

> > What? You can't amend a 10 year old return? And why not?
> > I don't know of any proscription on such a deed.
> > > No refunds of course, but anybody can fill one out and send
> > it in.

> You can amend a 10 year old return but the question would
> be: "Why?"

I wasn't about to answer THAT question! (grin)

(Ours not to reason why: ours but to amend or die.)
oh nevermind.

ChEAr$,
Harlan Lunsford, EA n LA

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#24 02-11-2006, 06:26 PM

Harlan Lunsford <hlunsford[at]bellsouth.net> wrote:
- quote -

> Seth Breidbart wrote:

> > In any case, you _can't_ amend a 10-year-old return. The
> > question I had is about the 2.9-year-old return; what if
> > they wait 2 months, and then they can't amend it?

> What? You can't amend a 10 year old return? And why not?
> I don't know of any proscription on such a deed.
> No refunds of course, but anybody can fill one out and send
> it in.

You can amend a 10 year old return but the question would
be: "Why?"

If them amendment shows an overpayment, IRS will not issue
the refund because of the statute of limitations. If the
amendment shows an additional tax due, IRS cannot assess the
new tax, also because of the statute of limitations.

On another point in this thread: An amended return does not
purge the taxpayer of any fraud commited on the original
return.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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#23 02-09-2006, 03:32 AM

Seth Breidbart wrote:

- quote -

> In any case, you _can't_ amend a 10-year-old return. The
> question I had is about the 2.9-year-old return; what if
> they wait 2 months, and then they can't amend it?

What? You can't amend a 10 year old return? And why not?
I don't know of any proscription on such a deed.

No refunds of course, but anybody can fill one out and send
it in.

ChEAr$,
Harlan Lunsford, EA n LA
Mon 6 Feb 2006

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#22 02-06-2006, 12:46 AM

Stuart A. Bronstein <spamtrap[at]sbcglobal.net> wrote:
- quote -

> "Phil Marti" <prm20871[at]verizon.net> wrote:

> > You're ignoring a couple of "if"s in the quotes. The
> > premise was we are now at the point that they know they need
> > to amend, but it would cost them money they don't want to
> > pay. Throw enough bucks into the mix, and I can't see the
> > difference between this and any other fraudulent failure to
> > amend.

> So what you're saying is that if someone turns in a return
> they believe is correct at the time, and ten years later
> find that it wasn't, failure to file an amendment would
> convert the earlier return into a fraudulent one,
> eliminating the statute of limitations.

Is there a statute of limitations on fraud?

In any case, you _can't_ amend a 10-year-old return. The
question I had is about the 2.9-year-old return; what if
they wait 2 months, and then they can't amend it?

Seth

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#21 02-06-2006, 12:46 AM

"Stuart A. Bronstein" <spamtrap[at]sbcglobal.net> wrote:
- quote -

> "Phil Marti" <prm20871[at]verizon.net> wrote:

> > You're ignoring a couple of "if"s in the quotes. The
> > premise was we are now at the point that they know they need
> > to amend, but it would cost them money they don't want to
> > pay. Throw enough bucks into the mix, and I can't see the
> > difference between this and any other fraudulent failure to
> > amend.

> So what you're saying is that if someone turns in a return
> they believe is correct at the time, and ten years later
> find that it wasn't, failure to file an amendment would
> convert the earlier return into a fraudulent one,
> eliminating the statute of limitations.

No, that's not at all what I said. Rather than rephrase,
I'll just leave it quoted above. You may notice the absence
of any reference to amending closed years, and even I know
that intent is an element of fraud.

--
Phil Marti
Clarksburg, MD

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#20 02-05-2006, 12:45 AM

"Phil Marti" <prm20871[at]verizon.net> wrote:

- quote -

> You're ignoring a couple of "if"s in the quotes. The
> premise was we are now at the point that they know they need
> to amend, but it would cost them money they don't want to
> pay. Throw enough bucks into the mix, and I can't see the
> difference between this and any other fraudulent failure to
> amend.

So what you're saying is that if someone turns in a return
they believe is correct at the time, and ten years later
find that it wasn't, failure to file an amendment would
convert the earlier return into a fraudulent one,
eliminating the statute of limitations.

Somehow I'd doubt even the IRS would go quite that far.

Stu

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#19 02-04-2006, 02:18 AM

- quote -

> > > > Amend! AT least for open years.

> > > If amending would cost money, are they legally safe waiting
> > > for years to close?

> > Not if IRS can sustain a civil fraud penalty. Fraud means
> > no assessment statute.

> The assumption is that at the times they filed, they did so
> properly according to their then-status. So how would it be
> fraud later?

You're ignoring a couple of "if"s in the quotes. The
premise was we are now at the point that they know they need
to amend, but it would cost them money they don't want to
pay. Throw enough bucks into the mix, and I can't see the
difference between this and any other fraudulent failure to
amend.

--
Phil Marti
Clarksburg, MD

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#18 02-03-2006, 07:07 AM

Phil Marti <prm20871[at]verizon.net> wrote:
- quote -

> "Seth Breidbart" <sethb[at]panix.com> wrote:

> > > Amend! AT least for open years.

> > If amending would cost money, are they legally safe waiting
> > for years to close?

> Not if IRS can sustain a civil fraud penalty. Fraud means
> no assessment statute.

The assumption is that at the times they filed, they did so
properly according to their then-status. So how would it be
fraud later?

Seth

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#17 02-02-2006, 12:45 PM

"L K Williams" <lanny[at]loxinfo.co.th> wrote:

- quote -

> Let's take this up another notch. as Emeril would say. I
> actually had a case in which the wife discovered after
> several years that her husband actually had two prior
> marriages and no divorces. IRS was after them for unpaid
> taxes from closed years. Theoretically, she was never
> married. She moved away and must have retained another
> accountant to help her because I never heard any more. But,
> since they were technically never married, the MFJ returns
> were incorrect, they were not eligible for this status.
> Could she, then, deny liability for the taxes based on his
> income?

Off the top of my head I'd think it boils down to whether
the assessment statute is still open. If it is, clearly she
can "undo" the joint return and file Single.

If the year is closed closed for assessment it seems she'd
have a pretty good innocent spouse case.

--
Phil Marti
Clarksburg, MD

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#16 02-02-2006, 12:35 AM

"Seth Breidbart" <sethb[at]panix.com> wrote:

- quote -

> > Amend! AT least for open years.

> If amending would cost money, are they legally safe waiting
> for years to close?

Not if IRS can sustain a civil fraud penalty. Fraud means
no assessment statute.

--
Phil Marti
Clarksburg, MD

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

#15 02-02-2006, 12:34 AM

"Dick Adams" <rdadams[at]smart.net> wrote:

- quote -

> > > In my day there was a word for women who accepted lavish
> > > gifts from men other than their legal spouses, and it wasn't
> > > "lady."

> Well, for women it might have been tramp, gold digger, etc.
> But due to gender discrimination, a man being a gigolo has
> neutral to positive connotations. Shorty after I met Susan,
> I told her I was a gigolo.

Of course in your case it wasn't a negative because of your
overwhelming charm and lack of too tight trousers and too
greasy hair.

--
Phil Marti
Clarksburg, MD

Moderator: Plus I am cute!

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#14 02-02-2006, 12:34 AM

"Gene E. Utterback, EA" <gene[at]alliancerax.com> wrote :

- quote -

> But since this is a mental exercise, let's add to the fun.
> Let's suppose the couple is "together" for 10 years and
> files 10 joint income tax returns. THEN they get an
> annulment. We can only amend the 3 open years to single
> status. What happens to the other returns, which now have
> an incorrect filing status?

They die a peaceful death as filed. This is also covered in
Pub 17.

--
Phil Marti
Clarksburg, MD

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#13 02-01-2006, 11:54 PM

"Gene E. Utterback, EA" <gene[at]alliancerax.com> wrote:

- quote -

> "Seth Breidbart" <sethb[at]panix.com> wrote:
> > William Brenner <wbrenner[at]nospamplease.net> wrote:

> > > A couple marries. The wealthy spouse gifts considerable
> > > assets -- securities, cash, an automobile, jewelry, etc to
> > > the other spouse.
> > > > > So far, so good. There is no gift reporting required. But
> > > soon after the gifts are made, for reasons we can only
> > > imagine, the marriage is annulled. Legally, it never
> > > happened.
> > > > > Is the gifting non-spouse now required to report the gifts?

> > To go along with that: they married in December and the
> > marriage was annulled in January. What filing status is
> > allowed?

> THIS part is easy - single! An annulment means that the
> marriage never existed so MFJ or MFS is not an option.
> But since this is a mental exercise, let's add to the fun.
> Let's suppose the couple is "together" for 10 years and
> files 10 joint income tax returns. THEN they get an
> annulment. We can only amend the 3 open years to single
> status. What happens to the other returns, which now have
> an incorrect filing status?

Let's take this up another notch. as Emeril would say. I
actually had a case in which the wife discovered after
several years that her husband actually had two prior
marriages and no divorces. IRS was after them for unpaid
taxes from closed years. Theoretically, she was never
married. She moved away and must have retained another
accountant to help her because I never heard any more. But,
since they were technically never married, the MFJ returns
were incorrect, they were not eligible for this status.
Could she, then, deny liability for the taxes based on his
income?

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

#12 02-01-2006, 06:35 AM

Harlan Lunsford <11tvkbc3n6d2r78[at]corp.supernews.com> wrote:
- quote -

> William Brenner wrote:

> > To take that even farther: If the annullment comes years
> > following the marriage (it happens) what about the MFJ or
> > MFS returns that were filed?

> Amend! AT least for open years.

If amending would cost money, are they legally safe waiting
for years to close? (If the IRS doesn't catch on quickly
enough, can it do anything about closed years?)

Seth

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

#11 02-01-2006, 01:19 AM

William Brenner wrote:
- quote -

> Seth Breidbart wrote:
> > William Brenner <wbrenner[at]nospamplease.net> wrote:

> > > A couple marries. The wealthy spouse gifts considerable
> > > assets -- securities, cash, an automobile, jewelry, etc to
> > > the other spouse.
> > > > > So far, so good> > soon after the gifts are made, for reasons we can only
> > > imagine, the marriage is annulled. Legally, it never
> > > happened.
> > > > > Is the gifting non-spouse now required to report the gifts?

> > To go along with that: they married in December and the
> > marriage was annulled in January. What filing status is
> > allowed?

> To take that even farther: If the annullment comes years
> following the marriage (it happens) what about the MFJ or
> MFS returns that were filed?

Amend! AT least for open years.

ChEAr$,
Harlan Lunsford
tue 31 Jan 2006

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