In part, below is an excerpt from the publication of Procedurally Taxing, published August 24, 2021, and it is very instructive concerning the importance of the Hardship factor in making Innocent Spouse claims.

Research of innocent spouse cases shows that proving financial hardship serves as the only way to guarantee that the taxpayer wins an innocent spouse case where knowledge is a negative factor.  Lack of significant benefit, marital status, and compliance with return filing obligations are not enough to outweigh knowledge in some Tax Court opinions.  Note that, in Sleeth (from the 11th Cir. this year), Ms. Sleeth was also said not to have proved financial hardship, and her case also involved only one negative factor (knowledge), and three positive factors (the ones in the prior sentence). Jacobsen’s positive factors included those from Sleeth, as well as an additional fourth positive factor — for his bad health.

In cases where knowledge is the only negative factor and there are three or more positive factors (one of which is lack of significant benefit), the taxpayer usually wins, but the taxpayer always wins if one of the positive factors is also financial hardship.

The post Hardship Factor in Innocent Spouse Cases appeared first on Webb & Morton.

Photo of Jason Morton Jason Morton

Jason Morton is a Partner in a small boutique tax law firm, Webb & Morton PLLC, with offices in both North Carolina and Virginia. He maintains the law firm’s very active

Blog, as well as maintaining a Vlog on YouTube. Jason…

Jason Morton is a Partner in a small boutique tax law firm, Webb & Morton PLLC, with offices in both North Carolina and Virginia. He maintains the law firm’s very active

Blog, as well as maintaining a Vlog on YouTube. Jason has published several featured articles with TaxNotes, the NC Bar Association Tax Section, Autism Parenting Magazine, local newspapers and most recently, working with Cointelegraph and Bloomberg Tax. Jason is also an Officer in the Army National Guard, most recently serving an active duty tour from 2016 to 2018. Most importantly, above all else, Jason is proud Autism Dad.