‘Innocent Spouse’ Provision May Take IRS Heat Off an Ex-Mate

Q. I was married for 14 years to a stockbroker. He took care of all our investments and never consulted me on any of them. I trusted him completely and never questioned any of our returns. Although I signed the tax returns, I never checked any of the figures, thinking that my husband and our accountant would know what they were doing.

I was divorced from my husband a year ago. The IRS audited our joint returns and said we underpaid taxes because of certain deductions on investments.

Looking back now, I realize that I was incredibly naive to believe in my ex-husband, but I think it is something that most women untrained in business would naturally do. Does the IRS take this into consideration or am I responsible for my ex-husband’s errors?

BC,

Laguna Niguel

A. The law does have what is known as an “innocent spouse” exemption. To qualify for relief, the innocent spouse must show that the other spouse’s gross miscalculation caused a “substantial understatement of tax,” that the innocent spouse had no reason to know of this gross error and that it would be inequitable to hold the innocent spouse liable for the deficit.

You may be able to persuade the IRS that you fit within this exemption. If not, the general rule is that you share liability for any taxes owed.

Q. I have a house that I have rented out for the last year. The tenant who was in it was a total flake who did not pay a cent during the last two months he was there. I brought an unlawful-detainer action against him and got my judgment. Before I could get him out, he filed bankruptcy and listed me as his only creditor. He now says that I can’t get him out because of his bankruptcy case. Is this true?

HT,

El Toro

A. In a recent U.S. Bankruptcy Court case in the district to which Orange County belongs, the court ruled that bankruptcy proceedings do not prevent a landlord from evicting a tenant when an unlawful-detainer judgment has been obtained.

The case points out that this relief for landlords is strictly created by the courts. The case suggests that residential landlords should lobby Congress so their interests may be protected like those of commercial landlords.

Q. I am 11 years old and my favorite shows are those with cops. I always see the cops giving the “rights” to the criminals they are arresting. It seems to me that they could get more out of the criminals if they didn’t tell them they didn’t have to talk. Do the cops have to do this?

PW,

Irvine

A. The “rights” you are talking about are generally the right to remain silent and the right to an attorney paid either by yourself or by the government if you cannot afford one. These rights are guaranteed by the U.S. Constitution and its amendments, the U.S. Supreme Court has ruled.

These rights are sometimes called the “Miranda rights” after the Supreme Court case that held that a police officer must give them to you before he asks you questions while you are in custody. If he does not do so, any statements you may make would not be allowed in court against you.

A police officer does not have to give you these rights if he does not question you. This means that anything you voluntarily say to him could be used against you in court.

Q. I have heard from one of my neighbors that you allow children to participate in a trial in your courtroom. She said that her child’s class did it as a field trip and that everyone really enjoyed it. Is this true, and how would I arrange for my child to do the same?

AT,

Irvine

A. I have put together a program where children visiting my courtroom put on an actual trial. Depending upon the age group, the trial is either “People vs. Goldilocks,” “People vs. Benedict Arnold,” or any other defendant that a teacher thinks would assist the children in learning about the court system.

Thanks to the enthusiasm of teachers, the program has been a success and much more educational to the children than merely coming to court and watching routine courtroom procedures.

If you are interested, you should have your child’s teacher or any youth group leader (i.e., Scouting or church) contact me to set up a time when the children can be brought in. I require at least 20 children of any age group to participate in this program. Hope to see you!

B. Tam Nomoto, county Municipal Court judge, answers readers’ questions about the law. Ask the Judge runs every other Saturday in Orange County Life.