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Amend to MFJ, husband not filed 3 years.


DANRVAN

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Husband has not filed for three years while wife has been filing separately.  They will owe about $30,000 jointly for federal and state.

It looks like the route to go is to file amended and show the wife as the primary taxpayer.  I am wondering if this will clear him of the penalty for not filing?

Has anyone on the board has been down this path?

Thanks, Dan.

 

 

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6 hours ago, DANRVAN said:

Husband has not filed for three years while wife has been filing separately.  They will owe about $30,000 jointly for federal and state.

It looks like the route to go is to file amended and show the wife as the primary taxpayer.  I am wondering if this will clear him of the penalty for not filing?

Has anyone on the board has been down this path?

Thanks, Dan.

 

 

  1. You will have to start with her return and amend to add his information.
  2. Who is primary will have no effect on tax or penalty consequences.
  3. Amending to include his unfiled information will NOT eliminate penalties and interest.
  4. Amending to MFJ will make her jointly and severally liable for penalties and interest.
  5. They chose the path/actions/procrastinations.  They are the cause of the penalties and interest.
  6. Be sure you charge adequately for your work.
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6 hours ago, DANRVAN said:

Husband has not filed for three years while wife has been filing separately.  They will owe about $30,000 jointly for federal and state.

It looks like the route to go is to file amended and show the wife as the primary taxpayer.  I am wondering if this will clear him of the penalty for not filing?

Has anyone on the board has been down this path?

Thanks, Dan.

 

 

You didn't give specifics, but I interpret your question "...will this clear him of the penalty for not filing?" as him having income in excess of the exemption amount, and if that is the case, he can't cure his non- or late filing by now filing jointly with the wife. I agree with Jack that you need to consider that the wife will also become liable for his penalties and interest.  You also didn't say if husband has received notices, but if I remember correctly, one can't do what you are attempting if the IRS has already created a SFR and then sent a notice of deficiency. 

If you want documentation for your file, the cite for when the returns are deemed as filed is sec 6013(b )(3). Safe link here: https://www.law.cornell.edu/uscode/text/26/6013

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The penalty for not filing might not be imposed but if "they" omitted more than 25% of income, they might be nailed with another accuracy penalty.

I hope this is a solid marriage, otherwise I would think twice about involving the wife on this huge tax liability.

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Thank you for all your comments. Looks like penalty for not filing could be accessed since joint return would not be considered filed until 1040x filed. But on the other hand it seems accuracy penalty would not go back to wife's return.

He said he has not received any notices Judy even though he has been issued 1099-misc box 7 for 2012-2014.

Now I have seen wife's returns and she has been filing HHH and claiming EIC:o

I will be talking to both in person before I proceed.




 

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1 hour ago, DANRVAN said:

Thank you for all your comments. Looks like penalty for not filing could be accessed since joint return would not be considered filed until 1040x filed. But on the other hand it seems accuracy penalty would not go back to wife's return.

He said he has not received any notices Judy even though he has been issued 1099-misc box 7 for 2012-2014.

Now I have seen wife's returns and she has been filing HHH and claiming EIC:o

I will be talking to both in person before I proceed.

Now you have a bigger issue to deal with.  This might be a reason for me to refuse this engagement.

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3 hours ago, DANRVAN said:

Now I have seen wife's returns and she has been filing HHH and claiming EIC:o

 

That would change part of what I posted about the date filed, but I don't think that fact changes any potential penalties and interest that may be assessed if you proceed with preparing amended returns for this couple.

Off-topic explanation:  Since I posted that link to sec 6013(b ) based on the OP's original information that has now changed, I want to clarify a point so that someone else isn't mislead. The IRS lost in tax court when it tried to argue that a return filed using HOH status fell under sec 6013(b ) as being filed "separate".  The holding was that HOH is not considered as "separate" under the wording contained in 6013(b ) (1). A good article from the Journal of Accountancy (safe link) explains that case.  Anyway, I don't think this will affect the OP's return because the husband hadn't received any notice.

 

Now let's get back to the topic - So your :o?   They live together, right?  Because I can't believe wife would be willing to file joint with estranged non-filing husband to get him out of a penalty situation that will expose her to that and more. These people sound like a mess that I'd most likely turn away too, depending on the story she tells about how her filing status was determined. 

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Her story?

Her story will be, I told the preparer that I wanted to file separate and the tax guy/lady prepared my taxes as HH. She wont tell you that maybe she went to two preparers because they stylist told her that with children she should get a bunch of money because she works (EIC).

Was the wife the one who approached you or was it the guy? If the guy approached you, this is what I would do.

I would file him as MFS and itemize his deductions or take 0 standard deduction. You don't need to see the other return unless the wife came to you and told that she wanted to amend.

With his papers in front of you, do you care if each June he was kicked out of the house and returned in January? Do you need that information? I don't think so... as long as you file MFS and itemized deduction. Just ask the husband for the wife's and ss number.

In any event, I reject this type of clients because divorce lawyers are and should be nosy. I am glad I prepare taxes and I don't need to be nosy as divorce lawyers.

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