In Uncategorized on 07/11/2016 at 16:52

That’s Judge Big Julie’s, a/k/a His Honor Big Julie Judge Julian I. Jacobs (hereinafter sometimes referred to as ”HHBJJJIJ”) message to Bonnie Maria Armour, Petitioner and Mark V. Poulsen. Intervenor, 2016 T. C. Memo. 129, filed 7/11/16.

It takes six lawyers (three for IRS and three for Intervening Mark) to get there, and Bonnie is standing up alone, seeking (and not getting) innocent spousery.

Turns out Bonnie knew their tax returns showing income from then-spouse’s Mark’s construction business (“MVP”) were bogus. How did she know, you might ask.

HHBJJJIJ will tell you.

“Petitioner was MVP ’s bookkeeper/office manager for approximately 20 years, including the years involved.  She developed and maintained the accounting program used by the business.  Her duties included:  (1) managing the company’s financial records, bank accounts, and American Express credit card account; (2) managing the company’s ‘end of the month check run’, which reconciled all charge accounts that MVP had from its vendors, roofing suppliers, lumber yards, plumbing supply houses, and other subcontractors; (3) reconciling the company’s bank and credit card statements; (4) managing the accounts payable and accounts receivable; (5) tracking inventory; and (6) managing the company’s payroll.  To these ends, petitioner had authority to write and sign checks on behalf of MVP, deposit money into the company’s accounts, and prepare checks and receipts for the business.  Petitioner was familiar with MVP’s clients and knew, or at least could have learned, the amounts they paid the company.  Before becoming MVP’s bookkeeper, petitioner had other experience in accounting.

“When petitioner managed MVP’s finances, her duties included the end-of-year accounting for the company.  She reviewed the company’s books and provided information and documents to the company’s certified public accountant (C.P.A.), JT, who prepared petitioner and intervenor’s joint tax returns. She also met and interacted with Mr. T during the years involved.  She admitted to ‘’booking things wrong’ for MVP and was advised that she had done so by Mr. T.” 2016 T. C. Memo. 129, at pp. 4-5. (Name omitted).

Y’all can see this is not going to end well for Bonnie.

Oh yes, Bonnie claims she didn’t review the tax returns for the years at issue before signing them.

True, to flunk the innocent spousery exam, the requesting spouse need have a Cartesian clear and distinct perception of the deficiency-creating items in the returns for the years at issue. Cf Section 6015(c)(3)(C). Well, Bonnie ran the show. Her claim she was just a keypuncher falls very flat.

Besides, she was funneling money from MVP to her horse care and horse boarding business. It’s amazing how often these horsey types are fiddling with the fisc.

True, Bonnie is up against it, and Appeals was unduly harsh.

HHBJJJIJ:” We note the Cincinnati Centralized Innocent Spouse Operation’s determination that the economic factor favored relief as petitioner’s gross income was at 250% or less of the Federal poverty line and that she did not have sufficient assets to make payments and still pay basic family living expenses.  The IRS Appeals officer’s own analysis indicated that petitioner’s household income was below the Federal poverty line and her expenses were slightly less than her income.  Yet the Appeals officer found that this factor was neutral.” 2016 T. C. Memo. 129, at p. 17, footnote 7.

But at close of play, Bonnie was the woman with the goods.

“We conclude that petitioner is not entitled to relief from joint and several liability under section 6015(f) for any of the years involved.  The most significant factor in reaching our conclusion is that petitioner had knowledge of the understatements of tax or deficiencies with respect to the joint income tax returns.  Petitioner was directly responsible for the underreporting of income with respect to the horse care and boarding business and, as MVP’s bookkeeper/office manager, she knew of the underreporting of income and excessive expense deductions attributable to that business.” 2016 T. C. Memo. 129, at p. 19.

If you knew, you’re through.

  1. […] Taishoff, IF YOU KNEW, YOU’RE THROUGH. If you knew your spouse wasn’t reporting all income on your joint return, it’s tough […]


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