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    Divorce Law regarding taxes accumulated by married couples

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    Mr. & Mrs. Bahlo were married and filed a joint income tax return for 2003. They had a taxable gain on their primary residence sale (2003) which is stated in their divorce agreement for 2003. Husband is specifically stated as being responsible for income taxes owed for 2003-in their divorce of 2004.
    The Franchise Tax Board came back 3 years ago and disallowed several basis calculations and disallowed self employment expenses and assessed Mr. Bahlo for the deficiency in the taxes owed for 2003. Mrs. Bahlo was unaware of this.

    Mr. & Mrs. Bahlo divorced in 2004 Mr. Bahlo never paid the taxes and subsequently passed away in 2011. The Franchise Tax Board is now going after Mrs. Bahlo with assessments from the 2003 sale of the home. The FTB has also disallowed her initial innocent spouse application. Are there any cases in the state of California which are similar which will help Mrs. Bahlo's case against the Franchise Tax Board?

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    Solution Preview

    Two cases may assist Mrs. Bahlo in her case against the Franchise Tax Board. The first case is California Franchise Tax Board v. Hyatt wherein a Californian was fighting the California Franchise Tax Board regarding their attempt to assess significant taxes on Mr. Hyatt for residential income tax. The basis of his case differs in the issue that was being challenged with his lawsuit, but the ruling could apply in this case based upon the tenets of the ruling. The ...

    Solution Summary

    The impetus for this solution is predicated upon divorce law in relation to tax responsiblities that are required by divorcees'. The case hinges upon a divorce that resulted in one party, the wife, being held responsible for taxes that were not paid by her ex-husband before he passed away. The state that this case originated in was California wherein the spouse attempted to utilize the "innocent spousal application" but was initially refuted. The purpose of this solution is to determine if any case law existed in regard to the Franchise Tax Board that denied the wives' initial application.