| “I think I will owe somewhere in the area of 15K. I make much less than he did and I was laid off my lousy $12/hr job when I couldn't wrap up his affairs in 3 days. Company policy. I think I am in a lot of trouble. What should I do?”----> If you sign a joint return, the IRS may be able to collect any tax relating to that return from you even if your spouse was the one who reported incorrectly. You're eligible for relief if you filed a joint return on which there was an understatement of tax due to an erroneous item relating to your spouse.;you didn't know, and had no reason to know, about the understatement when you signed the return;looking at all the facts and circumstances, it would be unfair to make you pay the tax. You apply for relief under this provision within two years after the IRS begins trying to collect the tax from you. If you meet all these requirements as said ABOVE, then you don't have to pay the portion of tax that relates to this erroneous item.The rule is available if you have assets of your own and want to protect them from collection by the IRS, these rules determine whether you can be held liable. Innocent spouse relief applies only to tax liability that arises from an "erroneous item." That means you can't use this provision for relief if you sign a correct return and your spouse simply fails to pay the amount shown on the tax return. This requirement is one of the biggest problems in obtaining innocent spouse relief. You don’t get relief if you knew the return was incorrect or even if the court thinks you should have known. Some court decisions indicate that you can't satisfy this condition unless you actually examine the return and ask questions about anything that doesn't seem right an unrealistic expectation in many marriages. If you qualify for relief under this rule, you're relieved of liability for tax, interest and penalties relating to the understatement. In most cases this will produce the same result as the separate liability election. But there are circumstances where you might obtain only partial relief under the separate liability election. That would happen if the tax item claimed by your spouse provided a benefit relative to your income. It appears that the rule described on this page provides full relief even in that circumstance. So in some cases you should try to qualify under both rules, and take whichever one provides better relief.OR If you sign a joint return, the IRS may be able to collect any tax relating to that return from you — even if your spouse was the one who reported incorrectly.However, you may be able to obtain relief using the separate liability election. This rule is considerably more liberal than the innocent spouse rule. But you can still be stuck if you signed a return you knew was wrong.To be eligible, you need to sastify either one of the two requirements.The person with whom you filed the joint return has died OR you haven't been a member of the same household with that person at any time in the 12-month period ending on the date you filed the election. Relief doesn't apply to any item your spouse reported incorrectly if you had actual knowledge that it was incorrect at the time you signed the return. The IRS has the burden of demonstrating that you had actual knowledge, however, and it isn't enough for the IRS to show that you should have known about the error. Relief under this rule isn't available if one spouse transfers assets to the other as part of a fraudulent scheme. The IRS won't automatically grant you relief under this provision, even if you clearly meet all the requirements described above. You have to elect this treatment by filing Form 8857, Request for Innocent Spouse Relief with the IRS. (This form is used for the separate liability election as well as innocent spouse relief.)I guess you need to get some professional help from a tax practitioner in your local area.Good luck; and feel so sorry for your spouse’s death.
“Can I call myself a professional gambler and write off gambling losses? How hard is that to do? I really don't gamble much and it's only my 'mad money'. But the win/loss statements I get from the casinos are pretty impressive. Would this work?”----> Professional Gambler Status until recently has been rarely seen on federal income tax returns, because frankly there were very few people who earned their living traveling from casino to casino.But with the onsurge of online gaming, the number of IRS filed tax returns showing Professional Gambler Status is expected to increase dramatically over the coming years. Over the years, quite a few court decisions have tried to define what it takes to be a professional gambler. The bottom line is that you must devote substantial time to gambling on a regular basis, and you must depend on gambling winnings as a meaningful source of income. It also helps if you conduct your gambling activities in a business-like fashion by keeping detailed records of wins and losses and developing and evaluating strategies. If you can rightly claim professional gambler status, report your gross winnings as income on Line 1 of Schedule C of Form 1040 (Profit or Loss from Business). You can report your losses (up to the amount of your winnings) and allowable out-of-pocket expenses (for transportation, 50% of out-of-town meal costs, lodging, and so forth) as business expenses on Schedule C. Please note that a professional gambler's allowable out-of-pocket expenses can be deducted in full on Schedule C without regard to the amount of your winnings. In other words, you are not required to combine out-of-pocket expenses with gambling losses in applying the losses-cannot-exceed-winnings limitation. Gambling winnings are taxable on your tax return. You can deduct gambling losses on your tax return only if you itemize tax deductions and only to the extent of your gambling winnings. You can claim your gambling losses as a miscellaneous tax deduction on Schedule A of Form 1040. It is important to keep an accurate diary or similar record of your gambling winnings and gambling losses. To deduct your gambling losses on your tax return, you must be able to provide receipts, tickets, statements or other records that show the amount of both your gambling winnings and gambling losses. You cannot deduct or carry forward a net gambling loss on your tax return; even if you are a professional gambler.
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