Ex-Spouse is assesed Trust Fund Recovery Penalty

Jeane L. Dintelman, v. United States of America, U.S. District Court, E.D. Arkansas, 2010-1 U.S.T.C.  (Jan. 7, 2010)

A husband and wife incorporated an entity which listed the wife as the President of the company (with the thought that a woman-owned business would be eligible for more contracts), even though she had lmiited responsibilities and duties in the business.  Subsequently the couple split up, even though the wife remained as an employee of the company. 

The finances, handled by the ex-husband, were in shambles, and the company failed to pay their employment taxes.  The IRS has the ability to pierce the corporate veil and assess these taxes to an individual taxpayer if they are deemeed to be a "responsible party."  The ex-wife, who was not involved in the mangagement of the company until its struggles became obvious to her, was still deemed a responsibile party by the courts. 

Aaron's Take:  If you are taking the title of President or CEO of a company, you best be involved intimately in all the activities of the business.  Love and Business are two distinct and separate activities, and you should never sign something just because your spouse tells you to.  My wife sure doesn't!  She even reviews our tax returns, even though she knows I'm "the expert!"

How to find out you're being audited long before an agent shows up!

The IRS has issued Tax Tip 2010-13 reminding taxpayers how to obtain transcripts and copies of previously filed tax returns.  A taxpayer may obtain, for free, tax return transcripts, which are summaries, or account transcripts, which show activiy such as IRS communication, filed extensions, assessment, tax return filing dates, payment informatin, and balances due. 

The transcript may then be used for lending purposes, if the loan requires the individual's tax returns.  The IRS provided transcript will confirm marital status, adjusted gross income, and taxable income.  Taxpayers may request these reports over the phone (800 829-1040) or by filling out form 4506T.  The transcripts shoudl be received between 10 and 30 days from when the IRS receives the request. 

An actual copy of a previously filed tax return may be obtained by filing Form 4506, Request for Copy of Tax Form. A fee of $57 per tax year will be assessed and the request will take much longer (up to 60 days). Copies may be obtained for the current year and the past six years.

Aaron's Take:  The transcript may also give you up to a 6 month head start on preparing for an audit.  Recently, more activity codes have been showing on transcripts which may indicate "return selected for audit."  If caught early enough, you can begin preparing for an audit long before it is ever assigned to a Revenue Agent (auditor).