IRS Audit?

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L1: IRS Audit?So, I’ve just been through a horrifically, horribly bitter divorce. Jaw dropping-ly so. It could be the next “movie of the week,” I swear.
So, I’ll be bluntly honest. I’m out for revenge. If you knew what had been done to me by my wife AND her lawyer, you’d want revenge too.
My wife has a non-qualified annuity with a SEPP plan. One year, she changed the withdrawal amount, which would typically bust the plan. When we called the IRS, they said that we could legitimately claim that the extra withdrawals that year (we only changed the withdrawal amount one year) were necessary due to medical expenses (we had a lot of medical expenses that year. Not much of a stretch).
Also, I happen to know for a fact that taxes on the withdrawals were figured wrong, based on a misreading of the IRS rules (the issue was confused because it was a NON-qualified annuity).
So, I’m thinking of turning over the documents to the IRS and tell them to have at my ex-wife. An audit from the IRS is the least I could do for her after what she did to me. Believe me, you DON’T EVEN want to know.
I can tell them she a) busted the plan and b) figured the taxable amount wrong.
HOWEVER we filed taxes jointly, and I was the preparer. If I tell the IRS what I know, will they come after me too? Or will they only go after ex-wifey because the annuity is a) in her name and b) in her social security number.
We are now officially divorced, so for this year, will be filing for the first time as single.
Oh, and by the way, ex-wifey started making the withdrawals in 2001. The IRS stands to gain a substantial payment from her in interest and penalties if an audit were to happen.
I’m sorry that this sounds cold blooded. Revenge is a dish best served cold, so I’m told.2011-02-01 05:24, By: Boyd, IP: [184.99.168.90]

L2: IRS Audit?Boyd,
I’m no tax expert, but it seems to me if you: 1. prepared the tax returns 2.filed jointly, and 3. signed them, and 4. were aware of these deficiencies in the qualifications of her SEPP withdrawals, they (IRS) can’t avoid coming after you as well. I don’t think the “innocent spouse” rule would come into play to protect you, and I can’t think of any other excuse for you avoiding joint responsibility.Revenge is not a good one to try at the IRS. Another old adage comes to mind in this case, “Let sleeping dogs lie”. KEN2011-02-01 10:22, By: Ken, IP: [71.192.121.212]

L3: IRS Audit?Boyd:
In your role as “Tax Preparer,” are you “trained in tax preparation” and hold any designations like “CPA” or “EA” or “Tax Attorney” or you work for a tax preparation firm but do not hold anyof these designations,or are you simply the “spouse who prepared the return?”
When you stir up a pot of hot oil and then try to dump it onto someone else, inevitably you will spill some … and possibly a lot …on yourself.
I am not in the tax prep business but have studied it quite a lot and I have prepared my personal taxes for over 40 years, and it’s not a simple return. From what I have learned over the years and based on what you have described, you are highly likely to suffer adverse consequences if you try to use the IRS to get back at your X. So like Ken said, on this subject you would be best to “let sleeping dogs lie.” Also, you both would be best served by getting professional tax assistance to clean up this mess before the IRS does come knocking with an audit.
Take your frustrations out some other, NON-LETHAL way.
Jim2011-02-01 16:01, By: Jim, IP: [70.167.81.119]