On-Demand: Innocent Spouse Relief Rules

 And then just know innocent spouse discussion can ever take place without comparing it against another issue called, injured spouse, which we always like to just compare and contrast the two, because they're not the same. I'm going to spend a little bit of time here and you're going to wonder, you're going to say to yourself, "Dan, why are you going through all this stuff, I thought you were going to talk about innocent spouse." I think some of this stuff is important and I just want to go through it, especially the conflicts of interest. I think the attorneys that are listening into the program consider this a lot, because I think the work that they do is probably much more transactional in nature, the CPAs and enrolled agents, maybe not so much we're considered to really be the trusted advisor where we're there day in and day out. Or at least on a quarterly or annual basis dealing with our clients on various issues.

 The advocacy issues don't come up quite as much as the attorneys there, but it's something that we got to keep our eyes out on, because there are situations and the innocent spouse is one of them, where we do have some advocacy issues that could potentially rise. And even in our normal compliance, we've got to be careful when we're dealing with any two individuals, whether they be a husband and wife, partners, owners, family members. We always have to have, I guess the spidey senses, I guess, to make sure that, we feel like we're going to have a conflict of interest, we should be raising the issue and discussing it. And we're kind of required to do this under Circular 230, which attorneys and CPAs and EAs are required to practice under. And you just have to remember that the practitioner should not represent clients before the Internal Revenue Service, if representation involves any conflicts of interest.

Conflict of interest exists if the representation of one client will be directly adverse to another. There's also a significant risk that the representation of one or more clients will be materially limited by the practitioner's responsibility to another client, former client, a third person or a person of interest to that practitioner. You're the practitioner you only have so much bandwidth.

And everybody deserves a fair representation when they have money involved in one of these advocacy issues, and everybody should have their own representative. And I think it's incumbent upon practitioners at the beginning of any sort of engagement like this to started identifying, when you're with people or when you're more than one person, identifying those times at which people should really seriously consider to get separate representation, just so that they get a fair hearing. Not withstanding the existence of the conflict of interest under paragraph A, of Circular 230, Subpart B, practitioner may represent clients, now these are the exceptions: when the practitioner reasonably believes that the practitioner can provide competent and diligent representation to each effected clients, the representation is not prohibited by law, and if the client waives that conflict of interest under an informed consent and confirmed in writing. And you want to be able to do that within a reasonable amount of time, but really no later than 30 days, once that conflict has been identified.

You just want to be careful too, that when you're particularly in these situations, particularly in the innocent spouse area, that you're careful when you're sharing information amongst spouses. You really shouldn't be keeping information secret in favor of one spouse over the other. When you start hearing terms like, please don't tell so-and-so this or so-and-so that, and that so-and-so is also your client, it's probably a pretty good indication that you have a conflict of interest. Also, if you get the written consents and the clients retain you as a practitioner, you should keep those written consents under file for at least 36 days, or, yeah, 36 months, so that you have that documentation to substantiate the fact that you're representing potentially conflicted clients.

Yeah, I would think that most of the attorneys that are listening in on this, they probably have seen this in one way or the other, especially those that deal in controversy issues, such as a divorce, maybe even a bankruptcy, this probably does come up quite a lot, or at least should be considered, when those issues come up, even the trust fund recoveries, but that's no, it's not, you can't do it on the trust and recovery. But whenever there's an income tax issue that comes up with, especially particularly husbands and wives, the ability to be able to use these relief provisions is a real plus.

 Okay. Very good. So again, I'm not getting into innocent spouse stuff yet, though it is somewhat related and you'll see why when we started talking about it. When you're looking at filing a return that's being filed jointly or married filing separately, don't take the filing casually, particularly in those instances where divorce is on the horizon, or there's going to be a breakup between a couple. You could always file separately and amend the file jointly, but you can't file jointly, and then amend that file separately, that doesn't work. And often it becomes more than just an issue of total tax, and I've been involved in quite a few issues where it becomes a point at which there's a lot of pressure being put on, because obviously overall in most cases you want to file jointly for tax purposes, because it's a better tax result.

But the ability to be able to separate the filing there may over overweigh that. So you've got to kind of take a look at it. And despite the fact that there may be a pressure to file jointly, you should really just take a look at the fact that, there might be an opportunity to save some future angst by doing it separately. Under Internal Revenue Code 6013, whenever you do file jointly, you are jointly and severally liable for all the taxes, interest, and penalties including any additional assessments that may come up. The IRS can go after either one of the spouses in a jointly filed return regardless of who's earned the income. And it doesn't matter if the spouses later divorce or separate. And this is a big one, there's no wording in a divorce decree that will find the IRS in that divorce decree, as far as, reimbursing someone for taxes that they may have wrongfully paid.

I've never seen a settlement agreement in a divorce proceeding where the IRS is named as one of the members of the contract. So the IRS is not binded to that. And the bullet point number three is important too, because often the IRS will go after the easiest path to get the income. And in a lot of the cases that I've dealt with, it always seems as though the spouse who was not earning that much is the one that the IRS is going after, the spouse that maybe was more financially sophisticated is somehow been able to hide out from the IRS, and the IRS isn't going through the trouble finding them, but they're going after the spouse that may not have earned as much income, and still living in the personal residence that the two spouses were living in. Though some of the common events that lead up to an innocent spouse claim is death, and in most cases, it's divorce, separation, extramarital affairs, addiction.

I see a lot of that happening where spouses and issues with gambling, and drugs have gone through, and they'll clean out the IRA accounts, let's say. And they just take that money, and they think that somehow they're going to get away with it. And then, two or three years later after they've gotten the divorce, or there's an issue that's going on, the IRS has caught up with them. And the non-offending spouse gets hit, gets blindside about all this. So the innocent spouse relief becomes a remedy at that point. Also fraudulently filed returns, that's not reporting side businesses, or even under reporting side businesses, that one of the spouses is running.

The other consideration, when you're dealing in this area is also, is, was it actual joint return filed? Was the innocent spouse, was the signature forged? Was it assigned under duress? Was there a marriage that did not exist at the filing? Was there an invalid filing? When you're trying to make this as a defense, you really want to make sure that the innocent spouse has actually filed a separate return, even though, I guess, the non-innocent spouse has filed a return jointly, at least you'd have somewhat like to stand on, if a separate return has been filed. But if it hasn't, oftentimes what can happen is that you can fall into what's called a tacit consent. Even though the spouse may have signed both names, there may be a claim by the IRS that this was all a tacit consent. The other spouse knew that if the other spouse wanted to file separately, they should have filed separately also. Also I'm not as versed in the community property estates, obviously most of them are out in the West.

 So whenever you're dealing in this area, whether it be divorced or innocent spouse, always make sure you check that carefully with any anybody, if you're not an expert in the community property estates, make sure you contact someone who is. So be very careful in that area. Two key definitions when I'm talking about the innocent spouses is the requesting spouse, you'll see that identified, and that is the spouse who is applying for the innocent spouse release. The non-requesting spouse is the other spouse, the "Guilty or offending spouse." It's not a politically correct thing to use. So the IRS normally will use non-requesting spouse and that's the spouse that's involved in the claim being submitted by the requesting spouse.

 And let's say I've gotten a question here that asks really, what does it mean to be an innocent spouse case? I'll just give you a couple of bullet points here, the innocent spouse case, it involves a situation where a spouse, or a former spouse improperly has reported income or admitted items on a joint return, and the IRS has gone in now and they're trying to collect the tax, the penalties, the interest from the other spouse, the one that has not created the issue on the joint return. And in the innocent spouse case, the practitioner should be attempting to convince the IRS that it should not be going after the non-offending spouse or the innocent spouse, and that's what we'll go through in our next section here.

Okay. All right. So when you look at innocent spouse, there's actually three remedies that you can go to. You have the Traditional Innocent Spouse Relief, under, Internal Revenue Code 6015(b). You have, Separate Liability Relief, that's Internal Revenue Code 6015(c). And, Equitable Relief, IRS code 6015(f). So before we get into the details within each remedy, let's just kind of compare and contrast the relief statutes under 6015. Obviously the most important thing is that the spouse has had to have filed a joint return. And obviously then at that point, if a joint return has been filed, it can't be undone. As I spoke about earlier, can only be used for income tax, is not available for trust fund recovery penalties, FBAR penalties or FACTA penalties. This is also, keep in mind, when you're in a collection mode within the IRS and the collection division is going after you, there is, I always refer to it as the letter campaign.

There's a series of letters that come down and if you're following-up into that letter campaign process, you get what's called a Final Notice of Intent to Levy, which allows you to then file for a collection due process hearing, which is a good thing actually. Because you end up going to appeals, dealing with what I consider to be a higher level employee of the IRS. And in your application for the collection due process hearing one of the choices is in a spouse. So just keep that in mind, as a strategy.

Any adverse IRS rulings that are made with respect to the innocent spouse can be appealed to tax court. All of the remedies that I listed, the three remedies I listed prior, you have to fill out a form 8857, it needs to be filed. And in order to request the innocent spouse, a pretty lengthy form. In addition, it has financial information requirements in there, which I would suggest that you take them very seriously, because in some cases if you're able to prove that your client has a financial a hardship, it could help you immensely in this, the whole process.

In the 6015(b) and 6015(c) remedies, you have two years from the start of any, what I call significant IRS collection activities, again, this is two years from the point at which the letter campaign action starts, such as the final notice, that there's been a state refund offset, then the two year clock starts. So you have the two years and in order to file for an innocent spouse at that point, the 6015(f) used to be that way, now they allow, the tenure collection period or a statute that they use to allow you to apply for innocent spouse remedy under that heading.

So let's look at the traditional innocent spouse under 6015(b). This could only be used when there's an understatement of tax. All right. That's when the actual tax reported, versus what should have been reported, right? And that's attributable to the non-requesting spouse, which is often discovered when there's an audit or could be an audit, could be just, the IRS just comparing 1099s to what's been reported on the return, and what may crop up as unreported income, or improper, or overstated deductions, all right? Or that could be causing this understatement of tax. This remedy is not applicable to underpayment of taxes. And if you have an underpayment of taxes, which is different from the understatement of taxes, this does not apply. There is refunds possible here within the normal three-year statute.

Marital status is not relevant for this relief remedy. So you can be married, divorced, separated, at the filing of the innocent spouse filing. Also has to be, there can be a ruling against the requesting spouse. It would be inequitable or unfair to not allow them the innocent spouse liability, when they grant the innocent spouse remedy, the liability is allocated based on respective income so that it gets corned off between the requesting and non-requesting spouse. And one of the most important areas here is to identify that the requesting spouse must not have known or have reason to have known of the error of the understatement, right? This is a very tough standard because the IRS must go through a process, and there must be evidence that's put forth to show that the requesting spouse did not know and if they didn't know. Especially they didn't the reason not to know, this is, I think is a pretty difficult standard to overcome.

Obviously to know is that the taxpayer would had to have direct knowledge of the tax consequences, on this, the reason to know is set up, it's actually has a reasonable person standard. If a reasonable person should have been aware, there's no relief that's allowed, right? So if the innocent spouse would have benefit from the understatement of the taxes, maybe there was an obvious lifestyle, maybe the lifestyle was kicked up during this period of time that the returns were filed incorrectly with this understated tax. So sometimes it's a difficult burden to overcome for the taxpayer, when the IRS can see that the innocent spouse has actually benefited from some of this and what I should have known looking at a return that the income that was being reported should have been higher.

All right. So then you have situations where, and I've seen these where, they IRA money was taken out in that cash, but the IRA money was used, and you have evidence that it was used for gambling or evidence that it was used to buy a home for someone's paramour. So, those would be instances where, it would be very difficult for the IRS to say that the innocent spouse had a reason to know, because they didn't know, because some money was hidden at that point. So you can see in this area the courts have ruled pretty toughly. And I will tell you that going through the innocent spouse process, the IRS reflects this, it can be a pretty tough process. You really have to be able to have all of your ducks in a row in order to get that innocent spouse.

So in this case, here is this Cheshire Case. This was a case about actual knowledge. After the tax court, this was appealed by amicus brief, at the appeals level level. The husband had taken out IRA money to pay down the mortgage for their personal residence and stated to the wife that the taking the money out of the IRA was a non-taxable event. And she believes him, and didn't check out the actual law herself. A joint return was filed, and then the IRS audited and assessed the tax, obviously the matching there, it's not brain surgery for the IRS to figure that out. They got a brokerage statement of 1099, or, and they didn't see that report on the return. So when they went to court, on this innocent spouse application, the wife took a position that she didn't know it was taxable.

Her husband told her it wasn't, so she believed him. And sure enough, the 5th Circuit at that point told her that it was her responsibility to check the tax law, she should have investigated. And if she did, and she knew that it was wrong, she could have been at that point opted to do a separately filed tax return. Again, it's a pretty tough format. And just some of the things to look at, for this reason to know standard, the nature of the erroneous item, the couple's financial situation, the requesting spouse's education and business background, the requesting spouse's precipitation with the erroneous items, the requested spouse's due diligence, was there enough, according to the reasonable person's standard to inquire about the erroneous items of omission or inclusion? Whether it be erroneous item was apparent when comparing prior returns, was there a big variance between that year's return and the years prior?

Did the requesting spouse received significant benefit? Again, an important area when you're looking at this. The affidavit if prepared, so does it support the requesting spouse not knowing. Again, that's a tough thing to get. But if you can get the affidavit of the non-requesting spouse stating that the requesting spouse didn't know, that could be a very, very helpful.

Okay. So the second innocent spouse relief remedy is 6015(c), and this is called the Separate Liability Remedy. And what you're doing here is you're seeking to allocate the tax deficiency in proportion to each spouse's income, somewhat somewhere too traditional. And it's normally a little bit easier to get amongst the three of these, again, you have to file a joint return. All right? Which again is a requirement for all three of the remedies, you have to file the 57. The one difference here is that under the traditional method, it doesn't matter what your marital status is.

That's just kind of makes it a little bit difficult, because if you're going for innocent spouse and it's not an overwhelming fact, but the fact that you're still married and now claiming innocent spouse, again, it's kind of tough for the IRS and in the courts, I think to get their head wrapped around that or it's much easier in a situation where you're no longer married or widowed, or you're legally separated, right? Which is, you're not of the same household for the last 12 months. Again, this works for understatement, not underpayment, which is similar to the traditional, you have erroneous items, you've got admitted income, you've got invalid deductions. Again, this is just normally picked up in some sort of an audit or comparison of the IRS with information returns that come in.

No refunds are available here, which is different from the traditional. And here, one of the big things that I think is really different here, that is favorable to the tax payer, is that the innocent spouse must not have actual knowledge, which is the same as traditional, but they don't have to have a reason to know, and it's not applicable to this remedy, which I think, really, really helps out, trying to make your case for this remedy. The liability is basically determined at this point. Once you have gotten your innocent spouse a favorable ruling, it's usually then determined as if the two spouses had filed separately.

I've got a couple of questions here. Going back to the Chesire Case, what if the taxpayer told the wife who was non-taxable, is probably a better set of facts, unless are sure they've win on it, but it's obviously a better set of facts, because the wife is relying on a professional at that point, to tell her whether or not it was taxable or not. The other question is, are you more likely to get audited following the divorce? I don't think, I have not seen that. That's not that something I usually try to keep track of, the little nuances like that, what causes audits and what doesn't, and on the timing and all that, I have not, I've never seen that as a trend anywhere where someone gets audited after the year of the divorce.

All right. So we'll go into our third remedy here. When all else fails, you pull out the 6015(f) equity relief remedy. You have to have gone through B or C to see whether or not they work and if they don't, then that's one of the criterias for being eligible pre-here. As with B and C, this is available for understatement, but what the exception here for F is that this is also for underpayment, right? So if you had an underpayment situation where you had the correct tax reported but you're underpaid, B and C wouldn't work, but F would. So you could then go into using F. When you consider all the facts and circumstances, which is very important in this section, it must be held that it would be inequitable to hold the requesting spouse jointly and severally liable for the tax.

If you get a favorable ruling here, the liability is a portion between the two spouses. I've been in situations where, it's usually, and if you pardon me, the incorrect or the nonpolitical terminology here is that, it's usually the wife is normally, though the innocent spouse and most, if not all cases that I've had, if there's any income associated with that spouse, I mean, they still owe the tax on that. All right. So if they get a favorable innocent spouse ruling, it's not like they are relieved of all the tax burden there. There's still maybe a small burden there for them, in comparison maybe to the non-requesting spouse, they still have that there. So they're not relieved of all of it. If they have income and it's taxable, they need to be able to pay that tax one way or the other.

You can claim a refund under F, it has to be done within the period of limitations for refunds, which is three years from the time the return, the latter of three years from the time the return is filed, or two years from the time that the tax was paid. So in summary if the tax has not been paid, all right? You fall under the 10-year rule, the collection statute rule. If the tax has been paid and you're looking for a refund, all right? You get the three or two year rule. So there are some steps here that you want to go through and keep in mind as you're going through the (6015) equity relief remedies. One is you want to determine if the threshold conditions are met. And then there's a series of balancing factors that you have to go through, when you're putting together your case file petition that you're submitting.

Yeah. I have a question here regarding alimony. Just keep in mind, alimony as of beginning of, I believe it's 2018, any new divorce cases that come through, this is as a result of the tax reform act that was signed late in 2017, is not taxable to the receiver of the alimony and it's not deductible by the payor of the alimony.

And the answer for that is true. So there's step one, kind of repeat what I talked about before we have to, we got to make sure we have a valid joint return that has been filed. You've gone through B and C and they there's no  applicability there. You can't get through B and C so you'll have to go into F. You've claimed you're doing a timely claim filing using the 10-year rule or the three and a half, 2 year rule. No fraudulent conveyance of assets, you can't have been shifting assets around.

The classic would be doing the scheme where the non-requesting spouse has been conveying assets to the innocent spouse, in an effort to try to avoid having to pay. If they become the lone person responsible then, they use strategy. But then maybe do some sort of an offer and compromise if their assets are low enough, maybe getting an offer at that point at a much lower amount, than what the taxes are assessed. The requesting spouse could not have been participating in any sort of a fraudulent return filing.

 And that the liability at issue is a trivial, obviously to the non-requesting spouse. So the balancing factors here in your write-up, and when I've done these packages, even though the 8857 is quite a few pages, there's a lot that has to go and back of that. And there's a write-up, usually a narrative with what's going on. You want to be able to document as best as possible, if there's health issues, you want to have doctor things, if there's gambling issues we've gotten stuff from the casinos to back things up, if we need to get someone's sworn statement, we do an affidavit. Anything that you can do to put together a case.

And that's what it does is putting together a case, and going through, and looking at these balancing factors, again, none of them, or totally dispositive, but they're all a measure of what's going on here, and you should be addressing them in your write-up. So you want to look at marital status, if you're no longer married, that's always a favorable. In this sort of situation, married, it's neutral. Economic hardship, that that can be more favorable, if it isn't an issue then it's neutral. Knowledge or reason to know, if you didn't have knowledge or reasons to know, it's obviously favorable, if not it's unfavorable, depending on who was financially dominant, if the non-requesting spouse is, it's favorable, if it's the requesting spouse, obviously it's unfavorable.

If the requesting spouse has benefited significantly, it's a favorable fact, probably a very big favorable fact. And if they did not, it's a favorable fact. If there's been abuse, or if the financial control has been used to overcome, it can overcome the favorable ruling, at that point. If there's a legal obligation based on settlement agreements, that's favorable. If they're both obligated, it's neutral. If the requesting spouse is obligated, that's unfavorable.

Again the settlement agreements between two divorcing persons is not binding to the IRS, but it can weigh on the case filing that you're doing here for an innocent spouse. Has as the requesting spouse been compliant, in the years leading up and in the years subsequent? If they've been in compliance is favorable, if not in compliance unfavorable. And is the requesting spouse, what is their mental and physical health that they're suffering from poor health, it's favorable, not suffering, an unfavorable.

Again, those are the factors that you want to go through, and you probably want to do those, not only for the app, but for the other two as well. You want to look at those factors. It's a good checklist to go through when you're building your case file, before you doing your submission for innocent spouse case. So in working the case, as I said, you're filing an 8857. You're really telling the story or you're providing specific facts. You're going through the transcripts of the tapes tax payers to see if there's anything in there that that could point out, other issues that you may want to bring up to help strengthen your case.

You want to put documentations together, like briefs, if you have separation agreements, statements, I always like to have the innocent spouse do the narrative. I always tell them, "Listen, take a couple days, maybe even the weekend, do what I call a brain dump and just throw everything you can on a piece of paper, I don't care if it's in a logical order or not, we'll work through all that, but we want to put as much on paper as we can, so that I could take that and then kind of rework that. So we can then have a good narrative that we can give to the IRS and really tell them the story."

If you do have an abuse case, you want to make sure that at the top of 8857, you're putting on there, potential domestic abuse case, all right? And this way, as you'll see below here, there's a reason for that. And as I said before, you want to be able to completely fill out that 8857, including the financial information. And it's almost like when you donate a form 433 for an installment agreement or for an offering compromise, look for planning.

There may be some planning opportunities in doing personal, these financial statement information that you include in here. Because if you can get to the point where you can point to someone being in a financial hardship it will help your case. All cases are centrally worked by a specialized group in Cincinnati, actually Covington, Kentucky. And in all these cases, the non-requesting spouse is notified. All right? They're basically given your, the copy of the file that you've sent them in your application. All right? And they then fill out a 12508, questionnaire. All right?

Which will display the requesting spouse's name, address, phone number, in that file. So if that is the case, you want to definitely be able to identify the fact, if you have a domestic abuse case here that you'll identified that clearly to the IRS, so they can deduct those files so that the non-requesting spouse doesn't have access to the court requesting spouse's new information.

So the non-requesting spouse gets to actually do a counterclaim here. So, again, for most of us, we've got to be prepared for the fact that we're going to have the non-requesting spouse probably pushed back on us. And most likely you're going to want to have, the information that the non-requesting spouse has submitted. And in most cases, when you call the specialized group in Cincinnati, they will basically tell you that no, they can't give it to you. All right? So you have to complete a freedom of information act, request, and go through that, not difficult to do, but you have to get that in order to get the file. The innocent spouse unit will issue a preliminary determination. Both sides will get a chance to respond.

Then there'll be a final determination, and if the final determination is done, then you can appeal the case. If it's unfavorable to you, to the appeal, the offices of appeal within 30 days, and then if need be, you can appeal this also to the U.S tax court within 90 days of the appeals ruling, unless you're in the collection due process, which then you have 30 days. So again, one of the things you want to make sure you're doing here is, you want to make sure that, you've considered the conflicts of interest before doing any of this work, just to make sure that particularly in the innocent spouse arena, that the husband as their own representation and the wife does as well.

Again, this is important to be able to know this is that you can get information in these cases and you'll need it. And in order to be ready to respond, whether you're representing the non-requesting spouse or the requesting spouse, you're more than likely going to have to go to the IRS's disclosure office to ask for the other spouse's filings. And I put the web address here. And you'd go there to determine where that filing should be and where to get that information.

This is just the chart, the next three pages. This is a chart of the from the IRS, flow-through chart, which is kind of summarizes what I've gone through, in the previous pages here, that's the traditional innocent spouse, separate liability chart, the equitable relief chart. And as promised, we'll end the program here with just comparing the injured spouse versus the innocent spouse. This is sometimes because it sounds, if you say quick enough, it sounds a lot alike, there's often confusion between the two. The injured spouse really is when there is a filing of a joint return, and there's a return that has a refund, and that refund is offset against the other spouse's, normally pre-marriage debt. So in those cases, it's clearly not the requesting spouse is debt as it would be in a joint new filed return, where they're both jointly and severally liable.

All right, so the IRS may come in and try to scoop out the refund to pay maybe a peace federal, or tax debt, and maybe child support from the state that come through a non-payment of alimony maybe a cause for offsetting it and student loans as well. All right? So there is a form called the 8379, all right?  Which is a form which can be filed, both as a preventative measure and separately as a refund claim. So you can, if you're filing returned and you know that this is going to happen or potentially could happen, you can file it with an 8379, and it will hopefully prevent it from happening. And if it doesn't, or if you didn't file it, you could file an 8379 to actually go out and request a refund claim from that offset of that refund. So that, and the program, all right? Hopefully you got a lot of information out of that. To the extent that I have any questions here. Let me just go through some questions here for you if I can, if they're not too extensive here.

I got a question here with request and with respect to a return has been filed, and then the spouse deceases after the filing year can go back and amend the return, that's been jointly filed to report separately. Now, the rule is that once you've filed a jointly filed return, you can't file it, all right, file it separately. It's got to be married. You've got to put it in there as, refund it jointly and you can't do it separately. If the wife is not aware of the tax issue, when it comes up from their file and return, and then they file a divorce, is this a way of protecting the wife? Again the fact that you're getting a divorce is  very favorable in these instances. Just through the fact that you're getting a divorce, it's a favorable fact. It's not dispositive. It's not going to overwhelm the IRS or the courts, but it is a favorable factor in the innocent spouse application. So, you can keep that in mind.

Yeah. And a question here, can a judge assign the backpacks just to one spouse? I'm pretty sure they can, and the judge is not going to adjudicate one form and the other on that. Okay. Got a correction on the alimony. The alimony that I talked about before, where it's not taxable for the receiver, not deductible by the payer, is actually in 2019. So you had to have the three, you got an extra year after the Tax Reform Act of 2017, you got the 2018, was still under the old rules. And then once a new divorce agreement went into effect, after one-one 2019, that was the new rules in place, which again, doesn't allow the receiver to pick up the tax nor the payers to pick up the deduction.

The reason for that obviously was that at the end of the day, the IRS felt that it was losing out, in those cases. So that was one of those things in the, when they were doing the reconciliation bill, which is what the Tax Reform Act of 2017 was, that was a tax bill where the tax effect had to be neutral. And they were looking for different ways of making sure that they could offset certain tax cuts with certain tax increases and that was one of them.