Taxing Lessons Case Summaries

Case — Innocent Spouse Relief

THE QUESTION At what point does a spouse’s knowledge of embezzlement income make innocent spouse relief unavailable? THE DISPUTE Taxpayer Says:  Husband should not have to pay tax on wife’s embezzlement income because he did not know of it at the time the original joint tax return was filed. Internal Revenue Service Says: Innocent spouse relief does not apply because husband knew…

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