Applying joint estimated tax payments when filing separately.
Example: H's 2004 tax is $6,000 and W's is $14,000; their total joint 2004 estimated tax payments were $12,000. Thus, 30% ($6,000/$20,000) of the $12,000 total payment, $3,600, applies to H; 70% ($14,000/$20,0000),$8,400, applies to W.
The regulations cited above were issued under former Sec. 6015, Declaration of Estimated Income Tax by Individuals, which was repealed in 1984.
Current Sec. 6015 contains the innocent spouse roles.As explained in Chief Counsel Advice (CCA) 2000 11047, the Service has continued to follow the Regs. Sec. 1.6015(b)-1(b) allocation rules; see Bell, 818 FSupp 444 (DC MA 1993), in which the district court held that the IRS could use that regulation to allocate estimated tax payments.
If each spouse's return is prepared by a different firm, it is highly recommended that the spouses and their tax advisers discuss the allocation of the payments and try to reach agreement, to avoid an IRS notice. Statements showing the allocation should be prepared and prominently attached to the returns.
If no agreement can be reached, the spouse who made the actual payments should consider attaching an explanatory statement to the return and providing copies of any documentation (e.g., cancelled checks), showing that the amounts were from bank accounts titled only in the payer's name.
FROM JOE MARCHBEIN, CPA, HUBER, RING, HELM & Co., P.C., ST. LOUIS, MO
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|Publication:||The Tax Adviser|
|Date:||Oct 1, 2004|
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