Innocent Spouse Pending - Am I being treated fairly?

I live in Oregon and I filed innocent spouse over a year ago. It was denied and I filed an appeal. It is currently being handled in an appeals office in San Jose, Ca.


Background:

I filed jointly with my ex in 1997. I had just had a baby and was overwhelmed. Although my ex lived in the same home, he kept himself physically and emotionally distant from me and the baby.

My ex often became extremely threatening and verbally abusive...and did at times became physically abusive... if I challenged him about our money. I was not working, so he felt I had no say when it came to finances. So, when he approached me to file jointly, I wanted more info..and I specifically asked, "Will I owe any taxes if I sign this?" He said no, but refused to allow me to join him at the accountant's office. When I pressed the issue, he threatened me. Turns out he did owe a lot, but lied to me.

Shortly after that, I decided to divorce him. I told my family about the abuse and the entire situation, but never filed with police, unfortunately. I did not find out about the taxes he owed for 1997 until 2001 when my $1200.00 refund was placed towards the several thousand dollars in taxes he owed and had not paid. So, even though he had told me we would not owe any taxes, obviously, he was dishonest with me and then just never paid it. He left the country shortly after our divorce. He is on the run, basically.

So, I am raising my son on my own and really struggling financially. This is just so unfair and I'm very frustated because I'm getting the runaround by the IRS Innocent Spouse appeals people.

So, here are my concerns regarding my pending innocent spouse case. Please tell me if anything here seems off or unfair:

1. I was told that if I did not have a police report regarding the abuse, it would be not be considered since there was no "proof". Even though I had family and friends who had heard some of my ex's outbursts over the phone...and even though they had heard all about it from me over the years...that does not count, according to my rep handling the case.

2. One year ago, I was sent a letter stating that my case was to be handled in the Seattle office, which is the closest office to my Oregon home. I spoke with someone in the office last spring and was told I would be contacted to set up a time to meet face-to-face to discuss my case. I was told it could be several months before I heard back. So, I called today and was told it had been sent down to San Jose. So, now I cannot meet in person and the San Jose office seems to be treating me like a number, whereas the Seattle office seems so much more willing to help. I want the case transferred, but am being told it is too late. But I was never told it was going to be sent to San Jose in the first place. So, is this fair?

3. I was told that because the state of Washington is a community property state (which is where the 1997 taxes were filed..and that is where we lived when I was married), that even if I am granted innocent spouse relief, I will still be responsible for half of the taxes owed...which comes to over 4000.00. She said the only way around this is if there was abuse...but since I have no "proof" that won't fly for me.

So, does anything sound off here?

[abezon]

It sounds like the IRS has given its agents certain guidlines for determining whether innocent spouse applies. If you meet the IRS guidelines, the agent will find in your favor & proceed from there. If you don't meet the guidelines, the agent will deny your claim.

At that point, you have to appeal to tax court. Tax court will look at all the facts all over again & apply the *law*, not the IRS internal guidelines. (This is why the IRS loses lots of cases in court.) Since you don't have police reports, you'll need to provide other proof, such as corroborating witnesses (saw physical injuries, heard abuse). Did you keep a diary then? Make any confessions in letters? Those statements were made "before you had any reason to lie" and would be admissible in court to show that you did not fabricate the abuse allegations recently.

While your case is in limbo, I suggest you alter your withholding so that you have a very small refund or even owe $100 or so. Then the IRS can't take your $1200.

I also suggest you speak with a tax lawyer or enrolled agent who handles innocent spouse claims. You might also consider bankruptcy, depending on your other financial circumstances.