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How hard is it for a spouse to claim "Innocent Spouse Defense" when they are found to owe millions in taxes to the IRS?

Costa Mesa, CA |

A plaintiff is claiming to own a business that is clearly not hers (because it was community property from the other spouse's prior marriage.) However, she is suing me for that company saying I stole it. I have found she owes millions to the IRS...Can she play it both ways? Win in Civil court as the legal owner of the company, yet claim the company is not hers when it comes to owing the IRS?

No....it's not for me!!! But, thank you for your concern! It's the plaintiff in a case whereby she filed suit against us for basically "stealing her company." I know she will play "Dumb" when it comes to the IRS, however, she has filed suit against us and is NOT the legal owner of the company, as we will prove in court. Just wondering what her chances are for her lies of trying to get off? BTW...I've reported the fraud to the IRS. How did such a simple question become so complicated? I simply wanted to know a person could claim innocent spouse defense in a criminal case involving the IRS , yet use a different defense in a civil case?

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Attorney answers 4

Posted

You need to hire an attorney immediately if you are being sued because you are waiving privilege and confidentiality by disclosing your litigation matters on AVVO.

THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction. The answer to question does not create an attorney-client relationship or otherwise require further consultation. Mr. Smith is licensed to practice law throughout the state of California with offices in Los Angeles County. He is authorized to handle IRS matters throughout the United States, and is also licensed to practice before the United States Tax Court. His phone number is 323-292-4116 or his email address is philsmithjr@worldclasslawyers.com.

Asker

Posted

No....it's not for me!!! But, thank you for your concern! It's the plaintiff in a case whereby she filed suit against us for basically "stealing her company." I know she will play "Dumb" when it comes to the IRS, however, she has filed suit against us and is NOT the legal owner of the company, as we will prove in court. Just wondering what her chances are for her lies of trying to get off? BTW...I've reported the fraud.

Richard Gordon Stack

Richard Gordon Stack

Posted

As Mr. Smith has indicated, discretion is the better part of valor, especially when you have a "live" suit., as here. Do you know whether plaintiff has filed an innocent spouse claim with the IRS? If so, then her ex-husband has a right to oppose her claim and to intervene in Tax Court in the event that the IRS administratively denies her claim and she files a Tax Court petition from such denial. Your attorney should reach out to the ex-husband to ascertain the basis of plaintiff's innocent spouse claim because he is entitled to receive any document that plaintiff submitted in connection with the administrative innocent spouse proceeding before the IRS, provided that he filed a timely opposition to her innocent spouse claim (he had 30 days to do so). By contacting the ex-husband, you will effectively be able to obtain discovery of plaintiff's innocent spouse submissions, notwithstanding the broad taxpayer privacy provisions of I.R.C. Sec. 6103. Good luck in your litigation!

Posted

Mr. Smith has given you excellent advice. The IRS would be very interested in finding a taxpayer taking an inconsistent position in civil litigation from the position that the taxpayer is taking with the IRS. However, the defendants in the lawsuit will have no access to the position that the taxpayer is taking with the IRS: tax returns are privileged in state court litigation, so if she lies, you probably won't be able to prove it..

Asker

Posted

Thank you so much for your opinion. As I have reported the situation to the IRS and other agencies, I understand I will not know the outcome. I have actually spoken to the IRS agent that I gave all evidence to and he has told me the same thing. However, he said it takes a couple years and they need ALL evidence....which I have supplied. I am completely outraged that this person has done this...there are other agencies involved and I have reported to all. I was simply wondering what their stand is on conflicting testimonies or defenses. Thank you so much for you input. It is really appreciated.

Posted

Agree with my colleagues here - both have given excellent advice. And please be very careful what you disclose on this public site.

Good luck.

Evan A. Nielsen is licensed to practice law in California and handles federal tax matters throughout the U.S. The information provided here is for educational purposes only and is not intended as legal advice for a particular matter. This response does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult an attorney.

Posted

As Mr. Smith has indicated, discretion is the better part of valor, especially when you have a "live" suit., as here.

Do you know whether plaintiff has filed an innocent spouse claim with the IRS? If so, then her ex-husband has a right to oppose her claim and to intervene in Tax Court in the event that the IRS administratively denies her claim and she files a Tax Court petition from such denial. Your attorney should reach out to the ex-husband to ascertain the basis of plaintiff's innocent spouse claim because he is entitled to receive any document that plaintiff submitted in connection with the administrative innocent spouse proceeding before the IRS, provided that he filed a timely opposition to her innocent spouse claim (he had 30 days to do so). By contacting the ex-husband, you will effectively be able to obtain discovery of plaintiff's innocent spouse submissions, notwithstanding the broad taxpayer privacy provisions of I.R.C. Sec. 6103.

Good luck in your litigation!

The answer to this question does not establish an attorney-client relationship. Moreover, this attorney is licensed to practiced law ONLY in the State of California. Answers to questions from users in other jurisdictions or states are meant to provide only general information. Users should contact a local attorney in their jurisdiction or state to address their specific tax issue.

Asker

Posted

No...just my guess because she uses an excuse for EVERYTHING!

Asker

Posted

I was just wondering....

Richard Gordon Stack

Richard Gordon Stack

Posted

I understand. In general, the greater the amount of taxes owed, the more critically the IRS will view an innocent spouse claim. While it's not impossible for a taxpayer to escape liability of an extremely large liability on the ground that he/she is an innocent spouse, it is very difficult to do so.

Asker

Posted

Thank you!!! That's all I wanted to know!!!!