On occasion a client comes in who has been a victim of signature fraud.\u00a0 This usually occurs when one spouse has all or a majority of the income and the other spouse has no income or very little.\u00a0 The spouse with the income is the one signing for the one with little or no income.<\/p>\n
The IRS has taken the position that if the spouse has given \u201ctacit consent\u201d then it doesn\u2019t matter if their signature is not theirs.\u00a0 For example, if previously filed joint returns were signed by just one spouse for both, then it is implied that consent was given and in this case, the IRS would not consider this fraud.\u00a0 The determination of a jointly filed return is based on the intent of the parties, not the presence or absence of their signatures.<\/p>\n
If there has been a history of separate filings and if one year is filed jointly with a forged signature, it is easier to show that there was no tacit consent and the IRS will usually side with the offended spouse.<\/p>\n
There is one other hook to consider if you live in a community property state like Arizona.\u00a0 Technically, both spouses are considered liable for one half of the combined income.\u00a0 The Arizona Department of Revenue has taken this position in recent years and the IRS can also make this claim if it is to their advantage.\u00a0 If this is the case then filing married filing separate would still include one half of both spouse\u2019s income and filing jointly may still be the best way to file.<\/p>\n
Before any decision is made it, is best to consult with an IRS representative experienced in these matters.\u00a0 If the marriage is intact, then filing jointly is probably still the best way to file.\u00a0 If there has been a divorce, filing separately can be a better option even if you have to claim one half of the offending spouse\u2019s income.\u00a0 At least you have limited your exposure to one half instead of all of the taxes due on a jointly filed return, if you spouse is unable to pay his or her share.<\/p>\n
Scott Allen E. A.<\/p>\n
Tax Debt Advisors, Inc<\/p>\n