Tax Regulations

¶ … Mrs. Hapless When considering your case for qualification for Innocent Spouse Relief, the facts are blatantly clear. Under certain circumstances, a spouse can qualify for relief from the IRS. Unfortunately, as detailed below, you do not qualify for any of these relief efforts. Your actions appear to be in strict opposition of the relevant tax code and can be considered fraudulent. Below is a brief explanation of the relevant facts pertaining to your case, the specific issues of your case, and our conclusion.

To begin, married couples who file joint returns are jointly liable for their federal income tax liability. In addition, married couples who live in community property states are jointly liable for community income regardless of how they file their returns. Innocent spouse relief takes three forms under Sec. 6015. The three instances are outlined below. Unfortunately, Mrs. Hapless you do not qualify for relief under any of the three procedures. The first instance is the Streamlined Procedures form of relief.

Under Sec 6015 (f), in order to quality for relief, the individual did not know or have reason to know of the understatement or deficiency or the underpayment of tax. In your case Mrs. Hapless, both you and your husband engaged in activities that are questionable under Sec 6015(f). First, both you and your ex-husband filed loan applications in with inflated incomes. This incomes with were found to be inflated occurred with your knowledge.

In addition, throughout the four years from 2005-2009, you purchased nearly $90,000 worth of home furnishings and materials and spent nearly $25,000 in vacations to Europe. This occurred while your reported no salaries and net losses on your business. The second alternative from the research regarding innocent spousal relief pertains to abuse. Under this condition, if the non-requesting spouse abused the requesting spouse or maintained control over the household finances, there may be appropriate recourse for relief.

This restriction coupled with the denial of access to financial information could be cause for relief. In addition, if the spouse was not able to challenge the treatment of any items on the joint return for fear of the non-requesting spouse's retaliation, there also may be cause for relief. However, Mrs. Hapless, you do not qualify under any of the above mentioned circumstances. From the filing of joint tax returns, you were not denied access to financial information.

In addition, it appears that you were not abused as you benefited from both home renovations and extravagant vacations. Furthermore, you both were understating your incomes grossly throughout the period, for tax return purposes, while simultaneously overstating your incomes for loan application purposes. This is collusion and unfortunately does not satisfy alternative two. Finally, the third major provision is the availability for refunds in both understatement and.