Joint Returns & Innocent Spouse

Question 1

What is the first step for claiming the innocent spouse relief?

Answer 1

Ask if it was a joint return.

Won’t need the relief if not a valid joint return.

Question 2

What does it mean if spouses have joint and several liability since they filed a joint?

May this be revoked?

Answer 2

Each spouse is responsible for the entire income tax liability even though all or part of the liability arises from income earned by or a deduction attributable to the other spouse.

An election to file a joint return may only be revoked BEFORE THE DUE DATE of the return, including extensions.

Question 3

What is the determining factor for whether it’s a joint return?

Can you infer this from the acquiescence of the nonsigning spouse?

Answer 3

The determining factor is whether “the spouses intended to file a joint return, their signatures being but indicative of such intent.

YES - this intent may be inferred from the acquiescence of the nonsigning spouse.” Hennen v. Comm’r.

Question 4

What if only one spouse signed?

Does this also apply to a spouse who did not sign an amended return?

When can there be a binding joint return even if one spouse failed to sign the return?

Answer 4

A deficiency assessed on a joint account based on the signature of only one spouse is generally not a valid assessment with respect to the non-signing spouse.

This also applies if the spouse did not sign an amended return.

There can be a binding joint return even if one spouse failed to sign the return, if the parties INTENDED to file a joint return.

Question 5

If both spouses didn’t sign or one didn’t sign, what do you look at?

Answer 5

If they both intended it to be a joint return.

Question 6

What 3 factors do you look at if it’s a joint return?

Answer 6

1. Whether the petitioner filed a separate return;
2. Whether petitioner objected to the joint filing; and
3. Whether the petitioner filed joint returns in previous years.

Question 7

What are 4 situations where a joint return is invalid?

Answer 7

1. Invalid election - One of the individuals on the joint return did not elect to file a joint return.
2. Forgery - One spouse did not sign the return.
3. Unlawful - Taxpayers had no legal right to file jointly (not actually married).
4. Return signed under duress

Question 8

What if the spouse signed under duress?

What is considered under duress?

Is mental intimidation under duress?

Answer 8

If a spouse establishes that he or she signed a return under duress, that return is not a joint return and the individual who signed that return is not jointly and severally liable for any deficiency in tax with respect to the return.

A tax return is signed under duress where “(1) A spouse was unable to resist demands to sign the return; and (2) she would not have signed the return except for the constraint applied to her will.” (defining duress in the tax context as “a constraint of will so strong that it makes a person reasonably unable to resist a demand to sign”).

Yes, “duress may exist not only when a gun is held to one’s head while a signature is being subscribed to a document. A long-continued course of mental intimidation can be equally effective, and perhaps more so, as a form of duress.

Question 9

What are the 3 kinds of innocent spouse relief?

Answer 9

1. 6015(b): “Classic” Innocent Spouse
2. 6015(c): Relief by Separation of Liability
3. 6015(f): Equitable Relief

Question 10

What are the 3 requirements for the classic innocent spouse relief under 6015(b)?

Who has the burden of proof on all elements?

Answer 10

1. The understatement of tax is attributable to the NON-requesting spouse;
2. The innocent spouse did not know and had no reason to know about the understatement of income/tax; and
3. Under all facts and circumstances, it would be inequitable to hold the innocent spouse liable.

Taxpayer has burden of proof on all elements.