Phil Marti wrote:
- quote -

Actually even an OIC in this case is probably not possible,
since she's still working. IRS has nothing to gain by
considering an OIC, and everything to gain by continuing to
endeavor to collect from both of them.

ChEAr$,
Harlan Lunsford, EA n LA

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"John D. Goulden" <jgoulden[at]okcu.edu> wrote:

- quote -

As has been noted, there's no way for her to get off the
hook with the IRS except an OIC. There are a couple of
things that she ought to do.

1. Adjust her withholding so she doesn't have refunds. (Why
everyone, not just those with back taxes, doesn't do this is
beyond me.)

2. Consider civil action against her ex for not abiding by
the divorce decree. He's probably judgment proof, but she
should find out.

3. You mentioned she's filing HoH, which implies dependents.
Are there child support issues? He's not going to jail for
unpaid taxes, but some states will get really tough on him
if he's behind on support.

--
Phil Marti
Clarksburg, MD

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- quote -

Not true, if she qualifies & succeeds in an OIC as a sole
applicant, collection of the remaining debt will continue to
be pursued from her EX until the statute expires.

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"John D. Goulden" <jgoulden[at]okcu.edu> wrote:

- quote -

If a joint return was filed for any particular year, the IRS
can collect from either spouse on that tax return. Where the
(ex) spouses disagree, they need to settle it between
themselves.

The innocent spouse won't work, because Y knew of the
underwithholding & still signed the joint return. I don't
see OIC being applicable either. There is no doubt that the
tax liability exists.

Y,s remedy is to collect from X. In your case, I'm afraid
that will have to be in court.

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] > > -----> real address on hobokeni or hobokenx <-----

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John D. Goulden wrote:

- quote -

It sounds like there was only an underpayment of tax, not an
understatement of tax. Therefore the only type of innocent
spouse relief available is equitable relief, hopefully that
is the type that was applied for. However since Y clearly
knew about the underpayment and did nothing about it at the
time, I can't see how she qualifies even for that -- perhaps
if there was a domestic abuse situation? Whichever Circular
230 professional (EA, CPA, etc) who helped with this so far
would be the best person to answer this question in detail
-- it's not a self-help or Usenet-help situation, IMHO.

Unfortunately her notion of wage withholding vs. "her share"
of tax liability is completely at odds with how it actually
works. If only she had started filing separately at the
first sign of this trouble...

Lastly, IANAL, but it seems there are so many
government-assisted ways to collect on back child support,
it's hard to understand why she hasn't pursued that more
vigorously.

-Mark Bole

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John D. Goulden wrote:

- quote -

You pretty much understand what's happened and why, and
raise an interesting issue as to separation of tax
liabilities. This can be done in certain cases where the
spouse truly is innocent. But her signing the joint returns
at the time is not one of them.

Sorry. Looks like after marriage, you should each file
separate returns.

ChEAr$,
Harlan Lunsford, EA n LA

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This situation: a married couple files joint returns for
several years. Y works one job over those years and always
had sufficient withholding to cover her share of their
taxes. X, however, did not - he worked several different
jobs and consistently (and deliberately, and over her
protests) underwithheld on his W4 with each new job. As a
result, they had federal tax due each year. They didn't pay
it and built up a tax liability of 10K or so. They set up a
payment plan and payed on it for a few years.

Then X and Y divorced. Y continues to work her job and has
her refunds confiscated because of their back taxes, which
with penalties and interest now amount to nearly 20K. X has
stopped paying on the tax debt (even though it's in their
divorce decree that he must continue to do so) and doesn't
seem to be very concerned about this problem.

Y feels like she's paid her fair share of these taxes - she
always had sufficient withholding and has even sacrificed 5K
in refunds after their divorce (filing as HOH) to service
this debt. However, because they had joint accounts and
because she signed the forms (in other words, she KNEW he
had a history of not paying their taxes) her application to
be considered an innocent spouse was rejected.

Does she have any options here, other than to appeal the
innocent spouse ruling and try again? Will the IRS consider
separating their joint tax liabilities into his-and-hers?
She is just sick of having to carry a tax burden created by
her ex's refusal to have sufficient withholding and by his
refusal to actually send the IRS their balance due for those
years. What about an Offer in Compromise? Of course it also
makes her sick to shell out thousands on an OIC to pay taxes
she feels she's already paid and that gets HIM off the hook
as well. And X is pretty spotty on paying his child support,
too, so even a few thousand dollars for an OIC is out of
reach for her right now.

Any suggestions - any at all - would be welcome.

Disclaimer - I'm dating Y, we're considering marriage in a
year or so, and I would hate to have to pay this off myself
or have to file as an innocent spouse for the rest of my
life. Not to mention the incredible amount of stress this
puts on her. So I do have quite an interest in seeing this
problem resolved.

--
John D. Goulden

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