Academic journal article Journal of Accountancy

Innocent Spouse Is Entitled to Refund

Academic journal article Journal of Accountancy

Innocent Spouse Is Entitled to Refund

Article excerpt

The Tax Court recently found that a taxpayer who petitioned for relief under Sec. 6015(f) was not precluded from receiving a refund of money levied from a joint bank account. The court ruled that relevant Massachusetts law gave the innocent spouse a 50% ownership interest in the account. Thus, under Sec. 6015(g), she could receive a refund of 50% of the money removed from the account if she was entitled to relief under Sec. 6015(f), the court held.

While amid a contentious divorce, Ann Marie Minihan and John Minihan Jr. sold their Massachusetts home in 2008 and deposited the proceeds into a joint bank account, which they mutually agreed was intended to fund their children's education. The divorce was not finalized until January 2011.

Though Mrs. Minihan had signed the couple's joint tax returns each year, she was not involved in the family finances. When the Minihans' financial situation deteriorated in 2007, Mrs. Minihan became aware that Mr. Minihan had not remitted payments for income taxes due for 2002 through 2006. Mrs. Minihan filed for divorce in 2007 and, in 2008, requested innocent spouse relief from joint and several liability for tax years 2001 through 2006.

The IRS pursued collection activities. In March 2010, the IRS received levy payments from the joint bank account of almost $84,000, which fully satisfied the tax liabilities for the years in question.

In February 2011, the IRS moved for summary judgment with regard to Mrs.

Minihan's petition for innocent spouse relief under Sec. …

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