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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4539
Experience:  Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
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Im in california. My husband has been filing our taxes since

Resolved Question:

Im in california. My husband has been filing our taxes since marriage. We are now getting a divorce and he claimed I under reported myself over the years. I have never met the accountant. Every year I only signed the e-file form when he presented it to me. We both know I was not reported properly as he didn't bring all my books, only bank statements. He has since filed married filing separately and informed me of this in late June of this year that i a, doing the same. He claimed 100% of the deductions. My new CPA filed my taxes claimed 50% Of the deductions (mortgage and interest from homes). Even if we amend our returns what will happen. Will an audit be triggered? What should I do, he stole my appointment books documenting my income. My quick books are a mess and do not represent my income as it was set up improperly by my husband, I never learned the program and only used it to give invoices to my clients (I'm self employed). What could happen?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

Lane :

I thin your accountant has the right idea ... these things are your to deduct as well

Lane :

If you simply stick t the truth? You'll be fine

Customer: Will this trigger an audit.....
Lane :

Audit's come for the most UNPREDICtable reasons... honestly, if you amend and get out ahead of things ... in my experience, it's those that are PRO-active ... rather that reactive that win ... audits usually come when you do nothing

Customer: Wether we amend it or not will an audit be triggered...
Lane :

No -one knows the answer to that question ...RIGHT NOW the IRS has VERY little resources

Lane :

BotXXXXX XXXXXne? amending and getting it right REDUCES the chances of an audit in my experience ... 28 years of experience

Lane :

They LOVE to audit people when there's been very little activity (when people stick their head in the sand) ... AGAIN, getting to them first is ALWAYS the best strategy

Customer: He has been under reporting me for years...this is the first year I'm actually doing my taxes myself and my total gross is much higher than its ever been...like 20k more...will that trigger a red flag? Taxes were paid on the total i prepared for the 2012 extension just due on the 15th for the extension
Lane :

Again, if you simply do the RIGHT THING ... report is AS IT REALLY is you'll be fine .... There's spmething called "innocent Spouse relief" for spouses of thoses that bfile and try to hide or conceal

Customer: He is trying to pin tax fraud on me I believe even tho he did the taxes and knew he wasn't giving the whole story, yet he is claiming I did my own taxes with accountant and he had nothing to do with it..he is a CFO of multi million dollar companies
Lane :

Topic 205 - Innocent Spouse Relief (Including Separation of Liability and Equitable Relief)


Many married taxpayers choose to file a joint tax return because of certain benefits this filing status allows. In filing jointly, both taxpayers are jointly and severally liable for the tax and any additions to tax, interest, or penalties that arise as a result of the joint return even if they later divorce. Joint and several liability means that each taxpayer is legally responsible for the entire liability. Thus, both spouses are generally held responsible for all the tax due even if one spouse earned all the income or claimed improper deductions or credits. This is also true even if a divorce decree states that a former spouse will be responsible for any amounts due on previously filed joint returns. In some cases, however, a spouse can get relief from joint and several liability.


There are three types of relief from joint and several liability for spouses who filed joint returns:



  1. Innocent Spouse Relief provides you relief from additional tax you owe if your spouse or former spouse failed to report income, reported income improperly or claimed improper deductions or credits.

  2. Separation of Liability Relief provides for the allocation of additional tax owed between you and your former spouse or your current spouse from whom you are separated because an item was not reported properly on a joint return. The tax allocated to you is the amount for which you are responsible.

  3. Equitable Relief may apply when you do not qualify for innocent spouse relief or separation of liability relief for something not reported properly on a joint return and generally attributable to your spouse. You may also qualify for equitable relief if the correct amount of tax was reported on your joint return but the tax remains unpaid.

Lane :

Again, innocent Spouse relief is what you need ot get you CPA to look at in a case like this:

Lane :

Topic 205 - Innocent Spouse Relief (Including Separation of Liability and Equitable Relief)


Many married taxpayers choose to file a joint tax return because of certain benefits this filing status allows. In filing jointly, both taxpayers are jointly and severally liable for the tax and any additions to tax, interest, or penalties that arise as a result of the joint return even if they later divorce. Joint and several liability means that each taxpayer is legally responsible for the entire liability. Thus, both spouses are generally held responsible for all the tax due even if one spouse earned all the income or claimed improper deductions or credits. This is also true even if a divorce decree states that a former spouse will be responsible for any amounts due on previously filed joint returns. In some cases, however, a spouse can get relief from joint and several liability.


There are three types of relief from joint and several liability for spouses who filed joint returns:



  1. Innocent Spouse Relief provides you relief from additional tax you owe if your spouse or former spouse failed to report income, reported income improperly or claimed improper deductions or credits.

  2. Separation of Liability Relief provides for the allocation of additional tax owed between you and your former spouse or your current spouse from whom you are separated because an item was not reported properly on a joint return. The tax allocated to you is the amount for which you are responsible.

  3. Equitable Relief may apply when you do not qualify for innocent spouse relief or separation of liability relief for something not reported properly on a joint return and generally attributable to your spouse. You may also qualify for equitable relief if the correct amount of tax was reported on your joint return but the tax remains unpaid.

Customer: What if your spouse didn't report your income correctly and he did the taxes...
Customer: Can I go to jail? Or fines and penalties...and is he equally liable as we both knew he wasn't reporting all. Should I do something? I read innocent spouse and I don't be
Lane :

N, jail is only for those that do thing with INTENT

Lane :

There's a BIG difference betwen tax mistake and tax EVASION

Customer: I have read about innocent spouse and my CPA doesn't feel either one of us would be able to claim that ...
Customer: Checks were cashed and not reported and we both knew it....
Lane :

The the best thing you can fo irs report as things really are ... and f you can't afford to pay? ... ask for a payment schedule: http://www.irs.gov/Individuals/Payment-Plans,-Installment-Agreements

Lane :

They WILL not go the criminal route if you cooperate

Lane :

That's only for those that WILLFULLY, "with purpose, intent" try to evade

Customer: Is he just as responsible or because checks went through my account he will not be?
Lane :

NO, it's the REPORTING that counts... (what you told them... what you reported) ... again they are very open to working with you IF you are OPEN to working with them

Customer: If they red flag us for the 2012 taxes ...claiming more than the 100% is that when I say something?
Lane :

I would be very truthful on your return ... THEN ONLY say something when they ASK

Customer: How does this effect ones record ...what happens to my permanent record...
Lane :

IRS looks at things from a TAX YEAR perspective ... they are ony ninterested in each tax year ...AS IT COMES

Customer: My 2012 return is truthful..I did it! So I should wait...? I'm trying to get my husband to amend his percentage of the deductions to make it come to 100%
Lane :

IF you under reported for a YEAR .. it's THAT year that they will pursue

Lane :

Yes... Do not raise ta flag UNTIL they say there is an issue

Lane :

I agree that the totoal should equal to 100%

Customer: So what happened already happened? They will focus on 2012 and see if there is a problem..not go back?
Lane :

They typically look at the last three year ... there is a statute of limitationa (last three year, effectively)

Customer: So if 2011 is under reported they won't go there if no reason...yet if we don't get it to 100% there will be a reason.
Lane :

Be prepared to to look at the last three years

Lane :

Very likely

Customer: So I should just do nothing right now?
Lane :

Yes... thell the trusth ... see what happens

Customer: Will they think its odd I made so much more money in 2012 then 2010 and 2011
Lane :

Have the discipline .... to wait

Lane :

NO

Lane :

People's income varies all the time ... jobs are lost ... jobs are obtained .. etc.

Customer: So try to amend it to 100% ...make sure 2012 is accurate and wait to see?
Lane :

(especially in TODAY's economy)

Lane :

\YEs

Lane :

Yes

Customer: Do married couples divorcing often make amends after filing separately ?
Lane :

ALL the time

Customer: Do they see amendments often when divorcing couples have to work out the deductions
Lane :

that's what the 1040x (amended return is for)

Customer: So that in itself is not a red flag...
Lane :

nope

Lane :

reMOST people do it for a refund

Lane :

because they missed somethng

Customer: My accountant attached a letter explains my position of getting divorced and my husband wouldn't give information
Lane :

sounds like, honestly, you're in good hands

Lane :

THis is a very common occurrence

Customer: If my husband won't adjust, do you think I should take no deductions to make it 100% ...I am very afraid of the audit and jail...and having it attached to my life forever
Lane :

no no ... really JAIL WILL NOT happen.... a penaly, at worst, maybe ... tax issues are civil issue NOT crimina; issues

Lane :

Just ... simply ... tell the truth

Customer: Will they consider it evading if I wait until a letter is received and the start explaining?
Lane :

THat's the only thing that wll hold water ... over time

Lane :

no

Lane :

IF there is what's called an information request ... jst answer it ... truthfully

Lane :

you're really over thinking and OVE WORRYING

Customer: I guess I was not sure if I should blow the whistle now before he does and puts it on me or just wait...
Lane :

THey're nt monsters

Lane :

Wait

Customer: Lol..lol..
Lane :

tell the trusth ... and have the confidence that comes with that

Customer: I am worrying ...as he is very vindictive and lying....
Lane :

the vindictive one, typicaly lose ... they see the pattern

Customer: Should I say something to him to help him see he should amend ...
Lane :

I would

Customer: He is a CFO I would think he knows
Lane :

AND keepthat documentation ... so you can say you did .. if it ever comes up

Customer: I sent him a not to stop threatening me with the taxes (he said he would take me to court).. And that we need to discuss the deductions and make amends...I copied my attorney
Lane :

Good .. the only court that matters when it comes to taxes it TAX COURT

Lane :

adn that ONLY happens when you are disagreeing with hat IRS says

Lane :

he's way out in left field here

Customer: Again, should I come down in my deductions if he won't or stick to what I'm entitled to?
Lane :

ALWAYS stick with what you're entitled ... you don't want EVER to do anything other than what's accurate .. you'll always win that way

Customer: I just think it could amount to 50k unreported in last 7 to 10 years...
Customer: I think this after going over some records..still I should wait...
Lane :

It's really hard to COMPLETELY understand here .. but .. if you are sure of what REALLY happened ... have the discipline to wait ... (and if the questions comes0 ... answer it .. truthfully ... with as much documentation as possible

Lane :

THAT! /// is a position of power .... those who are guilty ... always ..."squeak."

Lane :

don't squesk

Customer: So I must be disciplined to be quiet...I didn't know if I should call IRS and say anything ...I shall not!
Lane :

yES.... JUST BEPREPARED to answer ... with confidence

Lane :

.... It may never come

Customer: Ok...so worst will be fines and penalties if something comes of it..no jail
Lane :

iF IT does? blast him!

Customer: He wants it all on me saying I didn't provide him with all the info for accountant..
Lane :

THAT'S RIGHT .... MOST CERTAINLY ... jail time only comes foe those that have plotted... planned... evaded ... etc.

Customer: I'm sorry I keep asking the same stuff..just really scared
Lane :

the words they use are ... WILLFULLY ... WITH PURPOSE that's not you ... that's almost no one

Customer: It definitely looks like we planned to keep it ...and I knew
Customer: That's what I keep thinking is willfully and on purpose..
Lane :

stick with the truth ... stick with only answering when you've been asked ... you'll be fine ... even if you know in the back of your mind .. it's only when you keep trying to HIDE that you'll have problem ... jst bhave th discipline to waut and then answer accordingly ... you'll be fine

Customer: Ok..I will be patient ..
Lane :

Yes, . it's when you say OH NO not me ... vs yes that's correctt.. OR well, not exactly, but... that you will have a problem ... take it as it comes ... ALWAYS the best

Lane :

ONE .... step ... at ... a ... tome

Lane :

TIME

Customer: Thank you...I will wait and be honest if anything arises..yet if we amend it sounds less likely they will be to come looking..
Lane :

yes, I would agree ... again, being proactive ... (as opposed to RE active) is best

Lane :

DO IT ... and then wait ... the response may never come

Lane :

If this HAS helped, I would appreciate a feedback rating of 3 (OK) or better … That's the only way they will pay us here.


HOWEVER, if you need more on this, PLEASE COME BACK here, so you won't be charged for another question.

Customer: I can come back no charge?
Lane :

Thank you so much AND let me know if you have further questions

Lane :

Yes...

Customer: How does one come back for free?
Lane :

Just come back her ... ONCE you rate this will always be here;;;http://www.justanswer.com/tax/82hju-california-husband-filing-taxes.html

Customer: Ok..probably talk with you again...lol..
Lane :

OR feel free to bookmark (save as a favorite place)

Lane :

I'LL BE HERE

Lane :

Thanks

Lane :

Lane

Customer: Thank you!
Lane :

You're very welcome

Lane :

Let me know what happens .....

Customer: Do I hit save and exit before I submit my rating?
Lane :

Yes, I think that's right

Lane :

(I don't see t from your end)

Lane :

Thanks you so much!

Lane :

Again ... I'll be here

Lane :

again, on THIS one, come back here if you have a follow-up question.

Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4539
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 5 other Tax Specialists are ready to help you
Expert:  Lane replied 1 year ago.
Hi Debra...

Again, st come back here, if yo have a follow-up.

Thanks

Lane
Expert:  Lane replied 1 year ago.
Thanks MUCH!

Keep me posted....

Lane

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Lane
Lane
JD, MBA, CFP, CRPS
3667 Satisfied Customers
Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986