Atty Wife Not Entitled To Innocent Spouse Relief For Under Reporting

In Rogers v. Commissioner of Internal Revenue, No. 17-3358 (7th Cir. 2018) the US Court of Appeals affirmed the Tax Court’s conclusion that Mrs. Rogers’s participation through her counsel, an experienced tax attorney, in the prior Tax Court proceedings indicated her meaningful participation and therefore was not entitled to Innocent Spouse Relief.

Frances and her husband John filed a joint return for 2004. The IRS subsequently found the return deficient and informed them that they owed an additional $488,177 in income taxes and under reporting penalties of $138,732.

The couple filed suit. John, a Harvard-educated tax lawyer, represented them at trial. Frances, a former teacher with an MBA, doctorate, and a law degree, attended the trial. The Tax Court ruled against the couple, finding them jointly and severally liable, 26 U.S.C. 6013(d),

Three years later, Frances sought innocent spouse relief, 26 U.S.C. 6015. 

• The Tax Court rejected the claim. 
• The Seventh Circuit affirmed, finding that in the trial precluded Frances from after-the-fact seeking to avoid responsibility for those liabilities.

Such Relief Is Available Only If The Petitioner
Has Not “Participated Meaningfully In [The] Prior Proceeding,”
In This Case, The 2012 Trial.

Mrs. Rogers’s contention that she lacked knowledge of business and financial matters, including complex tax matters, and otherwise did not understand what transpired during the 2012 trial lacked credibility and she had every opportunity to raise her claim during the 2012 trial. Her testimony was self-serving and at odds with her education and experience.

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