posted
Okay, the short version of the story is that my husband pulled a major screwup last year and now owes the government (specifically, the VA) a bunch of money. We got a letter a while back saying that the debt is in collections, and that they'll be confiscating his tax return, if any, to pay it. Now, he only worked part-time last year and only for a total of about two months, so his return would be negligible and we don't much care about losing it. My return, however, will be close to a thousand dollars, and it would be really nice if I could keep it out of their hands. Is there any chance that if we filed separately instead of jointly, that they wouldn't gank my return? If there's a chance of that, then I'll file our returns separately, but if it's hopeless, I'll just save myself the extra paperwork and file jointly. I'm definitely not making any premature plans for that money, and I won't really believe that I'm getting it until it appears in my account. It won't be a disaster if it does get taken, but as I said, it sure would help us out to have it.
I know that the debt is going to have to be dealt with sooner or later, but seeing as this was his screwup, I would really like for him to quit hiding his head in the sand and deal with it himself instead of having me running around picking up after him. (sorry if I sound bitter). So, what say you? Should I try filing separately and see if I can slip past them, or is it hopeless?
Posts: 957 | Registered: Aug 2002
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posted
First, this isn't applicable, because Virginia's rules will be different. Second, innocent spouse is unlikely to help. Here are the elements for Federal innocent spouse relief:
1.) A joint return was filed. 2.) Understatement of tax caused by one spouse's erroneous information. 3.) The other spouse establishes that s/he did not know, and had no reason to know, of the understatement at the time s/he signed the return. 4.) Under all facts and circumstances, it would be inequitable to hold the other spouse liable for the tax liability.
These are the factors that contribute to whether someone should have known of the understatement:
1) level of education 2) involvement in the family's business and financial affairs 3) the presence of expenditures that appear lavish or unusual when compared to the family's past levels of income, standard of living, and spending patterns 4) the culpable spouse's evasiveness and deceit concerning the couple's finances
The test to determine inequitability is whether the taxpayer has received a "substantial benefit" from the omitted income.
posted
Yeah, doesn't look like I'd meet that at all, since I'm obviously well aware of the situation. Ah well, I suppose I'll just file separately and see what happens. C'est la vie.
Posts: 957 | Registered: Aug 2002
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posted
Well, awareness is measured at the time you signed it, so current awareness doesn't preclude. But it's still a hard hurdle.
Posts: 26071 | Registered: Oct 2003
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posted
You might want to prepare a return for separate and joint to see which would be better. there are some credits you can't get if you file separately.
Posts: 188 | Registered: Aug 2003
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Boon
unregistered
posted
No, innocent spouse is not what you need. You need INJURED spouse. Just fill it out and mail it in with your paper joint tax return. If you have questions, email me and I'll help.
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