Know anything about tax law?

Question

My sister-in-law's ex claimed her on his tax returns just after they had seperated, but before the divorce. He committed tax fraud, got a refund instead of paying the money he owed, and now my SIL is being held partially responsible (she had no idea he had put her on his return) they owe the IRS $13,000! Is there anyway for her to get out of this, HE is the one who commited fraud!

Answer 1

Sounds like a big mess. She needs to go to a CPA - ASAP. It is worth a few 100 bucks to make sure that her return is filed properly & see that the IRS doesn't hold her responsible for things beyond her control. Please try to convince her not to handle this herself. The IRS gets very nasty when they think you owe them $$$. This will not go away unless she confronts it promptly & correctly.

Answer 2

Assuming that he forged her name on a joint tax return, she should simply file a paper return as Married Filing Separately. The IRS will question her return since a "joint" return was already filed.

She'll probably have to sign a sworn statement under penalty of perjury that she did not authorize or sign the joint return herself but that should get the IRS off her case pretty quickly. The ex will have quite a bit more on his plate to deal with.

Answer 3

The problem mentioned is unfortunately common. The IRS has programs to help "innocent spouses". The attached link has the information, contact numbers and forms that can be used.

Answer 4

She can file Form 8857 (Request for Innocent Spouse Relief) since she signed a joint return with him. From your description, it sounds as though she didn't file with him and was unaware of what was happening. She will have to file a paper return using MFS or HOH if she has dependents to claim. It will take a little longer for her to get her return. Here's more on innocent spouse and equitable relief from the IRS:
http://www.irs.gov/taxtopics/tc205.html