AN INTERESTING NEW CASE for CP states

[kcjenkins]

It's a sad thing that this had to go to tax court to get justice for this woman. But for all of you in Community Property states, this one, while not 'citeable' is informative on how to argue the issue. This situation happens rather often, after all.

http://www.ustaxcourt.gov/InOpHistoric/Geaccone.SUM.WPD.pdf

[jainen]

>>how to argue the issue<<

More like how to beg and plead the issue. The court held the divorcee responsible for her share of the ex's income, even though she never received it and didn't even know how much it was. It also said the law does not give her full credit for what was withheld from her own paychecks, but that was "inequitable" so it condescended to give her a break even though (as it took care to point out) she should have been smarter about the whole thing, it's still not clear that she is in compliance for other years, and she really doesn't need the money anyway.

[kcjenkins]

I must admit that is the part of the CP laws that makes no real sense to me. How do you report 'your share' if, in fact, you did not 'share' in it, or even know how much it was? I'm not in a CP state, but even here, I see too many cases where one spouse is working a W-2 job and having extra held out to cover the taxes of the self-employed spouse,and when they split, it's always a mess.

[jainen]

>>when they split, it's always a mess

I know what you mean. Here in CA hardly anybody gets married anymore unless they were already married before, in which case they vow til death do us part you ain't gettin' any of my stuff, which of course is what busted up their other marriage in the first place but this time they put it in writing. So we invented palimony to enforce community property laws even if they never even got married, and now we have this thing about gays who aren't allowed to get married (although many did anyway) and are now stuck with filing MFJ anyway. And that doesn't even get started on the over-65's hetero's who are MFJ but can't tell their ex because it would cost to much too admit they are in love. Oy vey.

[MAMalody]

<<<and now we have this thing about gays who aren't allowed to get married (although many did anyway) and are now stuck with filing MFJ anyway. >>>

Since when, especially from a federal perspective, are gays who are "married" allowed to file MFJ?

[Julie]

They're not, from a federal perspective.

From a state perspective, "registered domestic partners" are required to file MFJ. Whether they got married or not, since the marriages were disallowed by the state.

<<<and now we have this thing about gays who aren't allowed to get married (although many did anyway) and are now stuck with filing MFJ anyway. >>>

Since when, especially from a federal perspective, are gays who are "married" allowed to file MFJ?

[jainen]

>>Since when, especially from a federal perspective, are gays who are "married" allowed to file MFJ?<<

I said in California, not federal. And it is required, not "allowed." And the effective date was January 1, 2007.

[MAMalody]

<<<I said in California, not federal. And it is required, not "allowed." And the effective date was January 1, 2007. >>>

Ah, the infamous "registered domestic partners." This ought to be fun in CA, two separate returns (single) for federal purposes. and then a MFJ or MFS return(s) for state purposes. Hmmm. Could cause a higher fee to be charged.

[jainen]

>>this one, while not 'citeable' is informative on how to argue the issue<<

There is indeed something to be learned from this, and I thank you for bringing it to our attention. For one thing, it demonstrates the system incorporates a lot of prejudice against an innocent spouse claim, so without a subjective plea there is little hope of winning on the technical merits of the case.

The first thing this taxpayer did was get IRS to stipulate to virtually all the facts, so the court could not trip her up on that. For example, one of the main problems was that her records were completely inadequate, but the court was not able to hold that against her. She might have made a stronger presentation on the six areas of analysis, but it was pretty obvious that all that was going to go against her anyway and her best argument was simply that it was not fair.