Question

Jasper and Crewella Dahvill were married in year 0. They filed joint tax returns in years 1 and 2. In year 3, their relationship was strained and Jasper insisted on filing a separate tax return. In year 4, the couple divorced. Both Jasper and Crewella filed single tax returns in year 4. In year 5, the IRS audited the couple’s joint year 2 tax return and each spouse’s separate year 3 tax returns. The IRS determined that the year 2 joint return and Crewella’s separate year 3 tax return understated Crewella’s self-employment income, causing the joint return year 2 tax liability to be understated by $4,000 and Crewella’s year 3 separate return tax liability to be understated by $6,000. The IRS also assessed penalties and interest on both of these tax returns. Try as it might, the IRS has not been able to locate Crewella, but they have been able to find Jasper.

a. What amount of tax can the IRS require Jasper to pay for the Dahvill’s year 2 joint return?

amount of tax=

Answer 1

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Answer: Requirement @ : What amount Tasper to pay return ? of tax for the can the Dahvill's IRS require year a joint * When spouses liable for the jointly filed file joint return, they are taxes, interest up penalty return. jointly and due from severally the * In is year a required the return to pay was for jointly Dahvill's filed. tax Hence, Jasper due of $ 4000. Note points to as they both separated legally and got divorced, Jasper has the option of claming relief by kling form 8857. It is clear from the case that tax default is only inrespect of income reported by Dahvill. These rekets can be avoiled, it Jasper can establish that he is Innocent and he is not aware of the under reporting of income. Relief !: Innocent has no Spouse rebef knowledge of (when he the under proves that he reporting) Reliet a separation of liability: - Available when the Spouses are legally separated. - Then, the Spouse it responsible for the amount of tax allocated for the respective spouses.

Relief 3: Eauitable Relief : - Available when the spouse is not able to avail xeliet under (1) 4 (2) above. - Need to establish that after taking into all the facts & ciraonstances into account, it would be unfair to hold Jasper as liable. - It is proved that there &s no transter of assets between the spouses to avoid taxes. the tax returns were not filed with an intention to commit fraud. The tax liability is attributable to the income оt mе оft" ( pov fe on .