Injured Spouse Allocation

[Snaggletooth]

Not long ago there was a thread about what a wife should do if her husband is being pursued by back taxes. Many of us (myself included) suggested filing separately.

Now comes the latest reading from NATP about form 8379. The writing suggests that if the couple attach form 8379 (Injured Spouse Allocation), then the IRS will assure that the injured spouse will still receive the maximum refund forthcoming.

Excellent strategy and this will be deemed such by the really smart folks.

My big problem is implementation. I suppose I can fill out the danged form. But next comes the question from my clients -- "How much is my refund?" And what do I tell them?

"Bertha, you're going to get back all the refund you would get back anyway."
"And how much is that?"
"I dunno, I have to send in this form and IRS is going to figgur it up."
"You mean you can't tell me?"
"No, but you can trust the IRS. They could take all anyway if they wanted to."
"Whadd'ya mean trust the IRS? Am I gonna get that Earned Income Thing?"
"Yes. In fact the IRS is going to calculate that too."
"Why can't you calculate it?"

I think you can see where this is headed...

[DTS]

Snag

I don't have an answer for you, but I'm about to find out. The first one for me and I'm filling out three for one client.

A couple that filed MFJ, but this gal had not filed in several years when she was single, so I prepared several (7-8) years returns for this gal and she owed all, but a couple of years. All of the open joint refunds were "seized".

They/she went on a payment plan and I inquired about doing this for him, but could not. Somehow, my client came to recently call the IRS about her acct. and they told her that since the acct. was paid in full, they would now consider a refund for the injured spouse and likely issue the refunds.

D

[DaveO]

I have a couple of clients in this boat together. I explain it to them like this; "I can file you as MFS in which case you will lose some credits but I can tell you exactly what your refund will be or I can file you MFJ with an injured spouse allocation in which case the IRS will apportion your refund." If they are uncomfortable with the uncertainty then they can be MFS.