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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 6169
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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I recently was married in the year 2013. My new husband and

Customer Question

I recently was married in the year 2013.
My new husband and I file jointly.
That year, 2013 my husband rolled over from his IRA that he had at Morgan Stanley from Northern Trust for the amount of $200,000 to his UBS IRA account, where he now is employed.
After that, the IRS has said he owes $46,000 by doing this.
My husband says he does not owe this and has been fighting with them since.
Since 2013, we BOTH get letters from the IRS saying we owe this tax. It has only his social security on it but addressed in my name separately, so I get a notice too.
My question is: my name is ***** ***** I HAD NOTHING TO DO WITH THIS IRA incident that he did.
Can I be held accountable? We did a pre-nuptial stating that his $ is his and my $ is mine.
Please Help!!
Submitted: 8 months ago.
Category: Tax
Expert:  Stephen G. replied 8 months ago.

When you file a joint return, the IRS can go after either one of you for the entire amount of any unpaid tax.

They don't care about your pre-nuptial agreement.

Now, there is a way for you to avoid having to pay his tax if he loses the battle with the IRS.

If they are at the collection stage it sounds like he's lost at least the 1st stage of the fight & he'll may need to go to the Appellate Division of the IRS or try to get the Taxpayer Advocate involved.

Is the problem one of timing that the transfer wasn't made within 60 days of the withdrawal?

If he has available funds they should take his money before yours. Sometimes they bill the Spouse also (as apparently they have in your case) as it tends to get things out in the open & the case gets resolved for the very reason that you're getting upset about it. I understand perfectly & there is a possible solution.

Perhaps you've heard of the "Innocent Spouse Rule"?

Expert:  Stephen G. replied 8 months ago.

There are timing requirements to seek the Innocent Spouse Relief.

Do you know when the IRS first tried to collect the tax from your husband?

Expert:  Stephen G. replied 8 months ago.

These are the criteria that the IRS requires for the Innocent Spouse Relief:

Innocent Spouse Relief

By requesting innocent spouse relief, you can be relieved of responsibility for paying tax, interest, and penalties if your spouse (or former spouse) improperly reported items or omitted items on your tax return. Generally, the tax, interest, and penalties that qualify for relief can only be collected from your spouse (or former spouse). However, you are jointly and individually responsible for any tax, interest, and penalties that do not qualify for relief. The IRS can collect these amounts from either you or your spouse (or former spouse).

You must meet all of the following conditions to qualify for innocent spouse relief.

  1. You filed a joint return.

  2. There is an understated tax on the return that is due to erroneous items (defined later) of your spouse (or former spouse).

  3. You can show that when you signed the joint return you did not know, and had no reason to know, that the understated tax existed (or the extent to which the understated tax existed). See Actual Knowledge or Reason To Know, later.

  4. Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understated tax. See Indications of Unfairness for Innocent Spouse Relief , later.

Innocent spouse relief will not be granted if the IRS proves that you and your spouse (or former spouse) transferred property to one another as part of a fraudulent scheme. A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner.

Expert:  Stephen G. replied 8 months ago.

To obtain Innocent Spouse Relief you must file Form 8857 as soon as possible.

When To File Form 8857

You should file Form 8857 as soon as you become aware of a tax liability for which you believe only your spouse or former spouse should be held responsible. The following are some of the ways you may become aware of such a liability.

  • The IRS is examining your tax return and proposing to increase your tax liability.

  • The IRS sends you a notice.

You must file Form 8857 no later than two years after the date on which the IRS first attempted to collect the tax from you. (But see the exceptions below for different filing deadlines that apply.) For this reason, do not delay filing because you do not have all the documentation.

Collection activities that may start the 2-year period are:

  • The IRS offset your income tax refund against an amount you owed on a joint return for another year and the IRS informed you about your right to file Form 8857.

  • The filing of a claim by the IRS in a court proceeding in which you were a party or the filing of a claim in a proceeding that involves your property. This includes the filing of a proof of claim in a bankruptcy proceeding.

  • The filing of a suit by the United States against you to collect the joint liability.

  • The issuance of a section 6330 notice, which notifies you of the IRS' intent to levy and your right to a collection due process (CDP) hearing. The IRS usually sends a section 6330 notice by issuing a Letter 11 or Letter 1058.

Expert:  Stephen G. replied 8 months ago.

The bot***** *****ne however is how far your husband is prepared to take this matter.

If he's missed a deadline and that's where the problem comes up, then there's the possibility that he may be able to seek a waiver of the 60 day deadline. I presume that he made the transfer between trustees of the two plans himself rather than having money sent directly from Trustee to Trustee which eliminates any of this type of problem.

The reason I'm asking about this is because if he plans to pay the tax, he may do so & still appeal the assessment. That would stop the penalties from running and eliminate the necessity for your to file for Innocent Spouse Relief, which you should be granted based upon what the issue is and the timing of your marriage, etc.

Expert:  Stephen G. replied 8 months ago.

The point is that if he's not going to pay & then fight, you are going to have to file the 8857 to have a chance of receiving the relief before they attempt or succeed in extracting the funds from you.

I'd be happy to discuss your husband's issues with him if he isn't otherwise represented. Some battles aren't smart to go at it alone when it comes to the IRS; if I knew what the dispute was about, I could better advise you as to what to do.