Joint vs. Seprate Returns
The post by Chears was a bit ambiguous; at one point he referred to a married couple filing separate returns.
On a joint return, each spouse has to sign the return, and has the right to get a complete copy of the return--even if they later get divorced or something. A complete copy of the return includes copies of all relevant information returns, such as Form W-2 and Form 1099-DIV. This principle applies even if one spouse has no income.
So for a joint return, my answer is yes, I think you can explain to the "other" spouse anything and everything about the return, because they are signing the return. They not only have the right to understand it; they have an obligation to understand it.
In the case of separate returns, things get a bit gray. If the couple is really separated and they are not cooperating at all on doing their taxes, then you may not be able to do both returns. It becomes a conflict of interest. And in that case, the spouse clearly does not have an automatic right to get information about your client.
With that being said, there is a small loophole that is very poorly understood, and rarely discussed, that allows a taxpayer to get sensitive, confidential information about another taxpayer, if they can demonstrate a lawful need for the information. It's in the IRS regs somewhere... This issue came up in a discussion last year that revolved around what happens if a parent refuses to provide their college-age kid with sufficient information to complete the FAFSA (student financial aid application).
But the cleaner example, I think, is that when a couple files separately, one needs to know whether the other is itemizing.
I'm not saying I would just give the spouse that information. Rather, I would advise my client that it is in his best interest to allow the disclosure. If the client doesn't agree, then I wouldn't give the information to the spouse.
The spouse may have the right to get that information, but they don't have the right to get it from ME. They can file a disclosure request with the IRS. Or something like that...
Anyway, the other gray area is when the couple is not separated, and they come to you as one client, and you come to the conclusion that it's better for them to file separately. (That happens a lot here in Ohio.)
In that case, if they have been clients for several years, common sense may authorize full disclosure in both directions. But if they are new clients, you might want to get it down in writing that even though they are filing separately, they are explicitly authorizing you to discuss both returns with each of them... particularly if they don't come in together, or if there's a lot of phone or e-mail contact...
BMK
Originally posted by BOB W
View Post
On a joint return, each spouse has to sign the return, and has the right to get a complete copy of the return--even if they later get divorced or something. A complete copy of the return includes copies of all relevant information returns, such as Form W-2 and Form 1099-DIV. This principle applies even if one spouse has no income.
So for a joint return, my answer is yes, I think you can explain to the "other" spouse anything and everything about the return, because they are signing the return. They not only have the right to understand it; they have an obligation to understand it.
In the case of separate returns, things get a bit gray. If the couple is really separated and they are not cooperating at all on doing their taxes, then you may not be able to do both returns. It becomes a conflict of interest. And in that case, the spouse clearly does not have an automatic right to get information about your client.
With that being said, there is a small loophole that is very poorly understood, and rarely discussed, that allows a taxpayer to get sensitive, confidential information about another taxpayer, if they can demonstrate a lawful need for the information. It's in the IRS regs somewhere... This issue came up in a discussion last year that revolved around what happens if a parent refuses to provide their college-age kid with sufficient information to complete the FAFSA (student financial aid application).
But the cleaner example, I think, is that when a couple files separately, one needs to know whether the other is itemizing.
I'm not saying I would just give the spouse that information. Rather, I would advise my client that it is in his best interest to allow the disclosure. If the client doesn't agree, then I wouldn't give the information to the spouse.
The spouse may have the right to get that information, but they don't have the right to get it from ME. They can file a disclosure request with the IRS. Or something like that...
Anyway, the other gray area is when the couple is not separated, and they come to you as one client, and you come to the conclusion that it's better for them to file separately. (That happens a lot here in Ohio.)
In that case, if they have been clients for several years, common sense may authorize full disclosure in both directions. But if they are new clients, you might want to get it down in writing that even though they are filing separately, they are explicitly authorizing you to discuss both returns with each of them... particularly if they don't come in together, or if there's a lot of phone or e-mail contact...
BMK
If they want to leave a message, call the office where there is a machine.
Comment