What Can Be Done to Protect husband of MFJ Return, no cooperation from wife?

[Uncle Sam]

MFJ return of married couple who have been clients for many years.
Client couple have been having numerous family problems for many years as well and are close to divorce but not there yet.
For all these years it's been the wife who has provided me the annual tax information as she is more "tax conversant" than husband.

Two years ago- the NY state tax department did one of their audits of itemized deductions by notifying them what they're auditing before issuing a state tax refund. The wife sends me the details.
I provided the copies of what I made copies of to the NYS Tax Department. Only one section (Employee Business Expense subject to 2% which was MOSTLY husband's) was wife's responsibility as she only provided me (written on the software's tax organizer) the itemized amounts. Once I gave her the copies to submit to NYS, I never heard from her as to what the result was, until this year's tax return (2018) where I had to pull the facts out of her. She finally sent me the details. The NY tax dep't accepted all of my provided documentation, and -0- of her responsibility, so they sent a refund requested less the portion due to her non-documentation.
She insists that a NYS rep told her that she doesn't have to amend the Federal return for the itemized deduction disallowed by NYS.
I prepared the amended return effected by the audit and billed them.
The wife refuses to sign the amended return that needs to be paper filed and pay the balance due.
They both have been told that a Federal amended return is required with additional tax. Husband is willing to cooperate and wants to file even if it means payment in installments.
Except for the 1st and 2nd installment of the bill he husband has been the one to pay off my bill for both the current return and the amended return.
Both of them are in financial distress - which is one of the problems that's causing their unpleasant marriage.
They're living in the same residence but live separately and wife is not civil to working with him on any matters.

My question is - how do I protect the husband in this non-filing of amended return? 2019 return will most likely be MFS and I will only represent the husband.

[ATSMAN]

After being burned years ago by a couple on their way to divorce court, I have made a business decision that it will be MFS if only one spouse is cooperating with me and the other spouse can find someone else to prepare and file their tax return. For a few MFJ (both spouses signing) I have done a few innocent spouse filings, but I try to avoid it with a 10 ft pole.

[Dude]

They are married and living together. They filed MFJ. If they were divorced there is a rev rul that can help but since they are married the IRS will want the signature. Only thing I can suggest is to get text messages or emails stating she refuses to sign and then send those to the IRS. Even then you will be rejected and have to appeal.

[TaxGuyBill]

If the husband wants to be protected, he can make a "deposit" for the 2017 taxes. It isn't actually a payment for the taxes (yet), but if/when taxes are assessed, it can be applied as a payment.

https://www.law.cornell.edu/uscode/text/26/6603

https://www.irs.gov/irm/part25/irm_25-006-001r#idm139644392081232

Just be aware that YOU have no responsibility for 'making' them amend. That is their decision. But if only one of them wants to do it, I don't think there is anything that can be done, except the husband can make a "deposit" for what would be owed if they did amend.

[Uncle Sam]

ATSMAN - innocent spouse rules come into play when there's unreported or underreported income. This case involves overstatement of itemized deductions.
Thanks TaxGuy for the references.

[New York Enrolled Agent]

ATSMAN - innocent spouse rules come into play when there's unreported or underreported income. This case involves overstatement of itemized deductions.
Thanks TaxGuy for the references.

Innocent spouse (if warranted) is available for an understatement of tax liability. Section 6015 is not limited as you suggest.

[Uncle Sam]

OK - I stand corrected.

I now have an issue of how to proceed with Sec 6603 in having the husband pay the 1040X tax. Since it was a MFJ return, I highly doubt the wife will cooperate in providing me with her POA signature to discuss with IRS.
Even if husband wishes to pay in full, it would need to be paid in installments over a number of months. Is there a specific form the checks should be submitted with, or would a cover letter referencing the situation and noting Sec 6033 suffice? Remember - the 1040X has not been filed (nor will it be because wife refuses to sign).

[New York Enrolled Agent]

OK - I stand corrected.

. Is there a specific form the checks should be submitted with, or would a cover letter referencing the situation and noting Sec 6033 suffice? Remember - the 1040X has not been filed (nor will it be because wife refuses to sign).

See if Rev Proc 2005-18 answers your questions.

[Burke]

Normally, most states have reciprocity with the IRS and they both share tax information procured upon audit with each other. I would think NY would be in this category, and eventually they both will hear from the IRS regarding the return adjustment. At that point, they can deal with the IRS by letter and refer to any deposits of tax due made by the husband. Divorce attorneys can thrash all this out in their settlement including factoring in the original refund.

[Uncle Sam]

I finally got to speak with IRS Chief Counsel's Office on this issue, and was advised to send a cover letter with the check not only providing name, Soc Sec, tax year but to note IRC 6603 and Rev. Proc 2005-18 describing the reason for the payment, and send it to the address where the tax return would ordinarily be filed. There is no specific IRS form to submit with the check.
Thank you to all who responded.