Legal Question in Tax Law in North Carolina

Re: Ex-tax return fraud many years, Im seeking protection

Fortunately, you are in good shape to be protected from the possible assertion of additional taxes, penalties and interest by the IRS. Any adjustments to the joint returns would be �deficiencies� as contrasted with �delinquencies.� The innocent spouse rules work poorly with regard to delinquencies (taxes shown on a return but not paid), but they work well for deficiencies, especially when the spouses are divorced or separated (and as long as the items that were misstated on or omitted from the returns were his items, and not your�s). Additional taxes resulting from IRS adjustments to his income and/or his deductions can be allocated to him pursuant to a simple election you can file, as long as the IRS can�t prove that you had actual knowledge of the understatements at the time the returns were filed, and as long as there are no impermissible transfers of assets. (Transfers in connection with the dissolution of the marriage are OK.) All of this is explained in my article on innocent spouse relief, posted in the articles section of my website at www.bjhaynes.com.

As for turning him in, you can certainly do so, and as long as you had nothing to do with the understatements on the returns, you would be in no danger. If the IRS recovers money from him, you could even get a reward. However, if there is any chance of actually getting alimony or child support, if he winds up owing taxes the IRS would in effect become a competitor for the money (although court-ordered payments like marital support obligations are generally given priority by the IRS, at least if he cooperates with the Service and doesn�t bring levies down on his own head by refusing to deal with the problem).

If you need assistance with this, please let me know. We have handled many cases like this over the years.