I follow innocent spouse cases pretty closely. This one is a little unusual. It is a guy claiming innocent spouse status as an abuse victim:
Petitioner testified that he was physically and emotionally abused by his ex- wife throughout the marriage. Evidence of twopolice reports documenting allegations of domestic battery were entered into the record. The first incident occurred on July 4, 2008, and the second on May 14, 2009. The first report states that petitioner refused to file a domestic battery complaint. The second incident occurred after the return for the year in issue was filed. Petitioner was listed as the victim in both reports. Petitioner’s ex-wife was listed as the “other person involved” in both reports–in the first report under the code for spouse and in the second report under the code for second victim.
The problem with his case was that he had prepared the return and the deficiency was from a math error. He wasn’t able to explain the connection. I’m pretty sure that if you took the exact same facts and reversed the genders the Court would have come up with the same answer.
This is a decision of the United States District Court for the District of Idaho. When Carol Filicetti divorced Joseph Filicetti, she got the marital residence. There was a small hitch though:
In the event Carol sells the residence within three (3) years from the date of entry of this Decree, she agrees to split any equity received from said sale after the payment of the remaining balance on the first mortgage and any costs associated with the sale of the property equally between her and Joe. Three years and one day after the Judgment and Decree of Divorce is entered the property shall be Carol’s and either retained or sold at her discretion, with her retaining all of the proceeds therefrom.
I wonder what the point of a clause like that is. What was Joe’s attorneyaccomplishing for him by getting it in there other than assuring that Carol would not sell the house for at least three years ? It turned out that it created aggravation for Carol, but that could not have been foreseen at the time.
Carol did not sell the house during the three years after the divorce decree was entered. But she did not record the divorce decree with the county recorder until October 2010, nearly five years after entry of the divorce decree. Meanwhile, Joe did not pay his federal income taxes for 2005, and in September 2008, the government filed a notice of federal tax lien against Joe for unpaid taxes. This quiet title action ensued. Carol seeks a determination that the federal tax lien cannot attach to her home.
Although, it seems obvious when I think about it, it would not occur to me that a divorce decree is something that needs to be recorded, but of course it is something that, in this case, affects the title to real property. I don’t know what the general practice is and it is the type of thing that will vary from state to state.
At any rate, it turns out the government did not have much of a case. When the IRS liens a taxapayer, they become entitled to whatever the taxpayer was entitled to. They stand in his shoes. Joe of course was not really entitled to much of anything so they weren’t even standing in stocking feet.
Thus, at the time the government imposed its lien, it had — at best — a claim to Joe’s contingent, contractual right to a monetary payment if the house sold. …Joe did not, however, have any remaining real property rights in the home; his contingent right to receive a payment was a personal property right. Consequently, the government’s tax lien cannot attach to Carol’s property. After all, “the tax collector steps into the taxpayer’s shoes.”
The government did have another argument. It had won the “race to the courthouse” – a barefoot race in this case.
Turning first to the Idaho recording statute, the government relies on the undisputed fact that it won the race to the county recorder’s office. The government filed its notice of tax lien in September 2008; Carol lagged behind by more than two years, filing the divorce decree in October 2010.
The discussion of that point got pretty lawyerly, but the court ended up ruling that it still did not get the IRS more than Joe was entitled to, which was absolutely nothing.