I have a client who was married as of 12/31/21. They separated in January of 2022, he did MFS for his taxes, but has refused to give her his tax return so she can do MFS. They live in AZ so it is a community property state. Is there anything I can do?
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Here's something to make your day worse
"Amount of community income unknown."
If you are aware of the source of the item of community income or the income-producing activity, but are unaware of the specific amount, you are considered to know or have reason to know of the item of community income. Not knowing the specific amount is not a basis for relief
"Dude, you are correct" Rapid Robert -
How much community property did they acquire between 12/31/2021 and January 2022?
Specifically, Arizona Revised Statute Section 25-211 provides that “all property acquired by either husband or wife during the marriage is the community property of the husband and wife.” The only exceptions to that rule are property acquired gift, devise, or descent or earned after service of a divorce petition.Comment
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"Here's something to make your day worse"
That seems unnecessarily alarmist. The information you link to only pertains "If you were a married resident of a community property state, but did not file a joint return and are now liable for an unpaid or understated tax," No one said anything about unpaid or understated tax.
This type of scenario is not uncommon (MFS subject to community property but no access to spouse's information). The IRS would rather you file a return with what you know than not file a return. Use the Form 8958 to show how you are allocating things, including zero allocations to spouse. Unless huge dollar amounts are involved, odds are it will go through just fine, especially since, as Lion pointed out, there was probably only a month when the marital community existed."You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe HowardComment
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The MFS filing in community property states requires the married couple to add their incomes then split the total. It is quite likely (in situations where one spouse refuses to divulge information) that one spouse earns much more than the other and thus there is a gross underreporting of income. The OP says they were married AS OF 12/31. I did not see where they were only married for a month. What I have seen is people who do this on purpose so that the lower income spouse can claim Child tax credits they otherwise would not be eligible for. I had a woman scream at me when I told her she had to include her husbands income.Originally posted by Rapid Robert View Post"Dude, you are correct" Rapid RobertComment
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You are correct, the OP did not state how much of 2021 they were married for, it could well be the whole year.
If the spouse reported all his income without regard to community rules, then no problem. If he did allocate amounts to her, then in an IRS audit they will come over to her along with the withholding and estimated payments. That might indeed lead to needing innocent spouse relief as you mentioned, but that's a lot of "ifs".
Pub 555 also describes situations where community income rules can be disregarded.
In the end, I provided one concrete suggestion for the question, "Is there anything I can do?" I think I'm the only one so far in this thread to do so."You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe HowardComment
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