MFS in community property state

[Questionguy101]

Taxpayer said his wife had already filed her own separate return based on her own income only. Since they live in a community property state, they should report their income half and half .But his wife insists on staying that way and refuses to amend her tax return.

Now what option does the taxpayer have? Actually his income is higher and it's actually to his advantage to report their income half and half according to the rule. But since his wife refuses to amend her return, can he just go ahead to file his separate return based on his own income even if his tax will be high in this way? The good news is he won't need to worry about claiming the standard deduction because there is no way his wife could have itemized in her separate return.

[solomon]

File with clients income and probably would find relief under §1.66-3 and 4.

[Harvey Lucas]

By the book no,

however, I operate in a community property state, have done so for about 30 years.

The rules say you have to report 1/2 of each spouses income on each spouses return, unless they lived apart all year.

It is always problematic to do this.

I know it is not the correct way, but over the years I have had to disregard the rule on a few occasions and report only the income of the spouse I was working with and ignoring the other spouses.

Of the times I have had to do it this way, I have never heard any inquiry from IRS.

Again, I am not saying it is right, only that in some cases you simply can't get the info from the other spouse and when I have went ahead and filed without that info I have not had any problems.

Harvey Lucas

[outwest]

Can only speak for my state..

Idaho will pull MFS returns for automatic examination. In other words, MFS = AUDIT ME, PLEASE.

Now if you've attached the backup for the exceptions and an allocation schedule that complies with the rules, it will go on through. But they do look at it because it's easy pickings for an audit.

[Questionguy101]

Idaho will pull MFS returns for automatic examination. In other words, MFS = AUDIT ME, PLEASE.

Now if you've attached the backup for the exceptions and an allocation schedule that complies with the rules, it will go on through. But they do look at it because it's easy pickings for an audit.

Well, my client does not get any benefits by filing MFS. Actually he will have to pay more taxes. So in case of an audit, I think the ones in trouble will be his wife and whoever did the tax return for her. His wife's tax preparer should not have done her MFS return in that way and should have advised her to share her information with her husband so they can both report their income correctly according to the Community State rule. His wife and her tax preparer are the ones who have caused this mess now.