Innocent Spouse?

[spanel]

Client filed MFJ 2017. W2 each approx 40k each. TP withdrew 55k from 401k and didn't have enough fed w/d and owed 5k IRS taxes.
Fast Forward to 2020, they are divorced, TP court ordered to pay the 5k in IRS taxes, but due to not w2 job, lazy, self employed he has not paid and the IRS is now coming after the Spouse.

Spouse says she didnt know the money was taken out until she signed the tax return and didnt see any of this money (why judge ruled she was not liable).

Would the Innocent Spouse form help at all?? Is there something else I'm not thinking about that might help?

Thanks!!

Chris

[New York Enrolled Agent]

Spouse says she didnt know the money was taken out until she signed the tax return and ...

Based on what you write it appears you don't have a great case. She should not have signed the return. §6015(c)(3)(C) contains in part.

(C) Election not valid with respect to certain deficiencies. If the Secretary demonstrates that an individual making an election under this subsection had actual knowledge, at the time such individual signed the return, of any item giving rise to a deficiency (or portion thereof) which is not allocable to such individual under subsection (d), such election shall not apply to such deficiency (or portion). This subparagraph shall not apply where the individual with actual knowledge establishes that such individual signed the return under duress.

[Lion]

https://www.irs.gov/pub/irs-pdf/p971.pdf

https://www.irs.gov/taxtopics/tc205

https://www.irs.gov/businesses/small-businesses-self-employed/introduction-to-innocent-spouses

https://www.irs.gov/businesses/small-businesses-self-employed/innocent-spouse-relief

https://www.irs.gov/businesses/small-businesses-self-employed/innocent-spouse-questions-and-answers