April 15th is more than just tax day
for Americans, it's our annual date of forced accountability that
most of us dread: But dealing with the IRS can be
even more stressful for innocent spouses, and here to explain what
an innocent spouse is--at least in the eyes of the Internal Revenue
Service--is our un-common sense expert and Dallas Morning News
columnist Benjamin Dover...
Question 1: We've
heard this term before, but what exactly IS an Innocent Spouse?
Answer 1: Here's
the textbook definition of an Innocent Spouse: "It's an exception to
the general rule that both signers of a joint tax return are
individually liable for the entire tax due plus penalties and
interest. When we sign a joint return, we're liable for the entire
tax due, even if you divorce your spouse, even if you didn't earn
the income that generated the tax, and even if you didn't know about
the omission of income or claiming of erroneous deductions.
But under the innocent spouse rule, a spouse may claim to not be
jointly liable if he or she did not know about the errors and did
not benefit from them."
Question 2: In your
column in today's Dallas Morning News you answer a letter from a
woman that's facing a $30,000 tax bill from her ex-husband, and
she's hoping to take advantage of this Innocent Spouse rule but is
concerned about pleading her case with the IRS on her own. Does she
have a right to be cautious?
Answer 2: I think
she's nuts if she tries to strike an Innocent Spouse deal with the
IRS on her own. Now's not the time to go cheap: Now's the time to
hire an advocate that knows their way around the Taxman
Neighborhood, either a Certified Public Accountant (CPA), an
attorney (preferably with expertise in tax matters) or an Enrolled
Agent (EA).
Since most taxpayers are already paranoid about dealing with the
IRS, getting past the "I can’t afford representation" excuse is a
frequent emotional victory for consumers that can jump-start them on
the road to (tax) recovery. The obvious fear-factor about
retribution from the world’s most powerful collection agency,
combined with fear over the potential amount of money owed makes for
a powerful disincentive combination to come clean.
[Here's more back story info on EAs: Affordable counsel from EAs can
move taxpayers light years closer to getting right with the planet’s
most powerful collection agency. Only EAs, attorneys and CPAs are
authorized to represent taxpayers in IRS matters. The role of the EA
dates back to 1884 when Congress acted to regulate persons representing
taxpayers in their dealings with the Treasury Department. Today more
than 10,000 EAs practice nationally–many are former IRS agents with a
unique perspective into the inner workings of the agency. They’ve either
passed an IRS-administered examination or worked in positions that
required them to apply or interpret provisions of the Internal Revenue
Code on behalf of the IRS.]
Question 3: You also
point out in this morning's column that April 15th doesn't mean much to
the millions of non-filers that have fallen out of the IRS system over
the years...
Answer 3: According
to the IRS’ Phil Beasley, an estimated 8.6 million "non-filers" are
floating through the system, and their stories of how they became a tax
"outlaws" cover the spectrum.
Question 4: What's
the general description of people that have fallen out of the "system"
Ben?
Answer 4: They
really fit into two categories: The first are the tax protesters who
have their predictable reasoning for why they don’t owe any dough...
...and then there’s the rest of the non-filing population–folks
who’ve survived a catastrophic event, a major physical or emotional
setback that initiated the non-filing spiral. Over the years it’s
become clear to me that loss
is the biggest category and #1 trigger for failing to file a
return:
Loss of a spouse
or mate.
Loss of health.
Loss of a
job...any or all of them serve as the catalyst to knock taxpayers
out of the system the first year and set the stage for fear-based
non-filing in subsequent years.
Question 5: Your
best advice for non-filers that want to get back into good IRS
graces?
Answer 5: It might
not be as bad as you think! In fact many times reformed non-filers
actually have refunds coming back to them!
Bottom line? You
don't know until you get some help pulling your stuff together;
life’s too short to look over your shoulder–I’ve compiled some
insights and options that will help you regain control in this
usually scary arena:
www.bendover.com/irs.asp.
Just a reminder that Mother's
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Mother's Day. Graduation.
Weddings. You don't have to kiss your cash goodbye when
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for all types of jewelry or watches! Learn how to
avoid getting hosed. Check out Ben's
diamond/jewelry buying tips and on-line buying
resource...all
assembled in one easy-to-reference section.....
The key to avoiding
automobile-related brain-damage? Deal with an
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Check 'em
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