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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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Lev, I have filled-out the insolvency worksheets and the 982.

Resolved Question:

Lev, I have filled-out the insolvency worksheets and the 982. I just want to double check - my husband and I file jointly but this debt (and all I listed on the worksheets) is mine. It is my understanding that although we file jointly I do not have to
fill out any worksheets for him? He owns a lot of rental property but nothing is in my name. Next question, can I use my credit report to prove the amount of debt and lack of property to the IRS? And I read somewhere that if I file this 982 I will be audited
-- is this true?
Submitted: 1 year ago.
Category: Tax
Expert:  Rachel-Mod replied 1 year ago.

Hi, I am a moderator for this topic. I sent your requested Expert, Lev a message to follow up with you here, when they are back online. If I can help further, please let me know. Thank you for your continued patience.

Expert:  Lev replied 1 year ago.
If that is YOUR forgiven debt - only you will prepare the insolvency worksheets and form 982 - even if you choose to file a joint tax return - thus only YOUR debts and your assets are counted.
If that was not your spouse's debt - that is not his income - and he doesn't need to prepare the insolvency worksheet and form 982.
You do not need to send insolvency worksheet to the IRS and do not need to proof anything unless specifically asked.
Filing form 982 doesn't not necessary triggers the audit. However - there is no guarantee that you will or will not be audited because the IRS is based such decision on many circumstances including just random selection for the audit.
If audited - you might be asked to proof all amounts you provide on the tax return - including those on form 982. You might ask to send insolvency worksheets and or other documentation.
If needed - you may use any type of documents including your credit report.
Let me know if you need any help.
Customer: replied 1 year ago.
When I last spoke with the IRS, the agent or person I spoke with said 982 needed to accompany a statement of assets & liabilities or at least that is what I thought he was talking about. This is related to my 2011 return & I told them I was filing a 982 to prove insolvency and wanted to know if I also had to file an amended return -- I think I am confusing myself.
Customer: replied 1 year ago.
May be I need to explain further, I never received any 1099-c s from any bank, just a letter from the IRS saying a computer comparison showed I had failed to report all my income - they (IRS) received two 1099Cs-one from Bank of America & one from Chase.
Expert:  Lev replied 1 year ago.
That most likely because you are filing late your 2011 tax return.
If timely filed - no need to provide any statements.
But if you are filing late - and your tax liability was already assessed - your return will be processed separately - and that is why you asked to provide supporting documents.
So your situation is a little different because (1) late filing (2) you are filing after assessment.
So - yes - you need to attach the insolvency worksheet to your amended tax return - and provide a list of your debts and assessed.
Unless specifically asked - no need to provide any additional supporting documents. You might be asked for additional documents - but so far - if not asked - do not send anything.
The IRS knows that is YOUR debt based on the form 1099C they received from the creditor - and do not expect anything from your spouse.
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22693
Experience: Taxes, Immigration, Labor Relations
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