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Innocent Spouse

Posted on January 31, 2018 at 2:30 PM

A not-so-innocent spouse gets innocent spouse relief in this case.

A couple who later divorced failed to report on their jointly filed return

taxable payouts from the wife’s retirement account, a portion of which was deposited

into the couple’s joint checking account. She claimed on audit that her ex-husband

should be liable for half the deficiency. IRS and the Tax Court let him off the hook

because, although all sides agreed that he should have known about the distribution,

there was no proof that he had actual knowledge of it (Bishop, TC Summ. Op. 2018-1).

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