May 2020 Blog Topics: (1) What do you do if you are Injured in a Car Accident (2) Moving Out of State with Children (3) IRS Innocent Spouse Relief

1. What do you do if you are Injured in a Car Accident?

Unfortunately, accidents happen. They come in all shapes and sizes. But, do you know what to do if you are injured by someone else in an auto accident? Were you the driver? Were you a passenger? Were you commuting in a Lyft or Uber rideshare? Believe it or not, many people do not know what to do immediately after an auto accident because they have just endured a traumatic event at no fault of their own.

There was a time not long ago when the Las Vegas Metropolitan Police Department would not respond to specific auto accidents.  That law, however, was changed and Metro is again responding to all accidents.

If you are involved in an auto accident, you should immediately call 911 and accept medical attention if you injured.  You should also make a police report as soon as possible.  The police report provides information about the accident and may contain witness statements, pictures, the police officer’s account of what he/she believed happened leading up to accident. Keep in mind, however, that police reports are not always accurate, so it is important that after you contact your local police department, you then contact an attorney.

Time is critical right after an accident. It is critical to your health should you be seriously injured; and, it is also critical to the value of your case. Going to the emergency room and/or a quick service medical facility is helpful, but it is not the end of treatment. Actually, it is just the beginning. A victim of an automobile accident must seek the proper medical care, whether that be through chiropractic work, pain management, surgery, etc. Your attorney should provide you with a list of medical providers to choose from.

Third, you must maintain the treatment plan. Failure to follow the treatment plan could lead to massive loss of value in a personal injury case. If you cannot get a ride to treatment, find one. If you are forced to miss a treatment day in a given week, make up the treatment in that same week.

Lastly, you must maintain contact with your attorney throughout treatment. Ensure that all documents are being sent from the provider to your counsel, verify that the treatment has a course (i.e. end goal and/or date), and always make sure any major medical procedure is discussed with your attorney before it is performed.

2. Relocating Children Out of Nevada

You went through the child custody legal process already and have a custody order from the Judge. Now, however, you must move out of town for a job, or perhaps you need to be closer to family for support, or maybe even you’re in the military and will soon receive PCS orders. Whatever the case, you intend to take your children with you – can you just take them, without asking the other parent or getting an order from the court?

The answer to that question is a resounding “no.”  If you try to move out of state with a child without the other party’s permission or a court order, you can be found guilty of felony child abduction. So, what do you do?

Two Nevada statutes outline the procedure for relocating with a child. Nevada Revised Statute 126C.006 applies to parents who have a court order for primary physical custody of a child (generally defined as a parent who has a child more than 60% of the time). In this situation, the law requires that the relocating parent must first attempt to gain the permission of the other parent to move with the child. This permission, if given, must be in writing.  If the other parent does not give permission in writing, the parent wishing to move must then file paperwork (specifically, a “motion”) with the court.

Nevada Revised Statute 125C.0065 applies to parents who have joint physical custody of a child, either by court order or by operation of law. In this situation, the parent wishing to relocate with the child must again first attempt to obtain the consent of the other parent, in writing.  If consent is not given in writing, the parent wishing to move must file a motion with the court.  The difference this time is that the joint parent’s motion must also include a request to modify joint physical custody to primary physical custody.

In either case, after the motion for relocation is filed, the Judge will likely hold a motion hearing in which the parties and/or their attorneys will argue for each position. In order to get an evidentiary hearing (similar to a trial), the parent asking to move, must demonstrate, through their allegations in their motion, that there is the possibility that they could prove that relocation would be granted under Nevada law.   demonstrate that he or she the parent wishing to move must show the Judge why it would benefit the child to relocate and show that he or she is not trying to move just to keep the child away from the other parent.

If the parent wishing to move can prove this “adequate cause” to proceed, the Judge will then set an evidentiary hearing.  The evidentiary hearing is when both sides will have the opportunity to call witnesses and offer evidence in support of their case. 

In preparation for the evidentiary hearing, the parties are permitted to conduct “discovery,” which is the formal, legal process of information-gathering. During discovery, both parties will likely ask the other party to answer certain questions and provide certain documents. They may also issue subpoenas to obtain additional records, such as the child’s school or medical records, as well as conduct depositions of witnesses.

Nevada Revised Statute 126C.007 lists several factors the Judge will consider when deciding whether to allow a parent to move. These factors include:

  • How much the move will improve the quality of life for the child and the relocating parent;
  • Whether the relocating parent’s motives in relocating are honorable, and whether the relocating parent wants to move just to keep the child away from the other parent;
  • Whether the relocating parent will comply with the Judge’s orders for visitation between the child and the other parent;
  • Whether the non-relocating parent’s reasons for not giving permission for the relocation are honorable; and
  • Whether there will be a realistic opportunity for the non-relocating parent to have adequate visitation time with the child.

Once the judge has analyzed all of the statutory factors, and determined whether the relocation would be in the child’s best interests, he or she can grant or deny the relocating parent’s request to relocate with the child.  If the relocation is granted, the Judge will also issue a visitation schedule for the non-relocating parent, institute or modify the child support order, and determine how the cost of transporting the child is to be allocated. The Judge also has discretion to order that the non-relocating parent reimburse the relocating parent for his or her attorney’s fees if the Judge finds the non-relocating parent did not give permission for the relocating parent to move without having reasonable grounds for the denial or to harass the other party.

Relocation cases are difficult, emotional, and involve a lot of legal strategy and research regardless of which side of the case you are on. An experienced attorney can help you present your best case possible.

3. Why the IRS Isn’t Completely Heartless: Innocent Spouse, Separation of Liability, and Equitable Relief

It’s not uncommon in a marriage that one spouse is responsible for preparing the couple’s joint tax return and the other spouse signs off without ever reviewing it. After all, it’s their spouse and they’ve always done the taxes. They’re not going to do anything wrong, right?

Typically, when a married couple files a joint tax return, they are jointly and severally liable for the taxes and any interest or penalties that arise from that return, even if they later get divorced.  This means that the spouses or former spouses are not only jointly liable for 100% of the obligations, but they are each also individually liable for 100% of the obligations.  And this is true even if their divorce decree says that only one party is responsible for the debt. Divorce decrees are entered by state judges who have no authority to alter federal law. So, even if the divorce decree mandates that one spouse hold the other harmless from any tax debt that arose before the divorce, the IRS still has the ability to come after both spouses.

What do you do, then, if your spouse makes a major mistake, or even commits fraud, on a joint tax return and you had no idea? The IRS offers three types of potential relief: innocent spouse relief, separation of liability relief, and equitable relief.Innocent spouse relief provides relief from additional tax owed on a joint tax return if your spouse/former spouse failed to report income, reported income improperly, or claimed improper deductions or credit and you did not know, or have reason to know, about the mistake. To qualify for innocent spouse relief, you must meet all three requirements:

Innocent spouse relief provides relief from additional tax owed on a joint tax return if your spouse/former spouse failed to report income, reported income improperly, or claimed improper deductions or credit and you did not know, or have reason to know, about the mistake. To qualify for innocent spouse relief, you must meet all three requirements:

  1. You and your spouse/former spouse filed a joint tax return that has an understatement of tax (deficiency) that is solely attributable to your spouse/former spouse’s error – for example, if you get a notice that you owe back taxes from a prior year because your spouse, unbeknownst to you, only reported $40,000.00 in income but actually made $60,000.00 that year, and that is the only reason for the deficiency;
  2. You prove that, at the time you signed the joint tax return, you didn’t know and had no reason to know about the error; and
  3. Considering all the facts and circumstances, it would be unfair to hold you liable for the error.

Innocent spouse relief must be requested within two years of the date the IRS first tried to collect the deficiency. 

What constitutes knowing or having “reason to know” about the error? You “knew or had reason to know” of the error if you had actual knowledge of it or if a reasonable person in a similar circumstance would have known about it. You can also be found to have known about it if you make a deliberate effort to avoid knowing about the error to avoid liability, or if the property resulting in the error was jointly owned by you and your spouse/former spouse.

In determining whether you had “reason to know” about an error, several factors are considered, including:

  1. Your level of education;
  2. Deceit or evasiveness on the part of your spouse/former spouse;
  3. How much involvement you had in the activity leading to the tax liability;
  4. How much involvement you had in the marital business or household finances;
  5. Your business or financial expertise; and
  6. Whether there have been “lavish or unusual expenditures” compared to the past.

Separation of Liability Relief comes into play when an item was not reported properly on a joint tax return and provides for the separate allocation of any additional tax owed, making one spouse responsible only for the amount of tax allocated to you, as opposed to jointly and severally liable for all of it. This type of relief is available for joint returns and you must meet one of the following requirements:

  1. You are divorced or legally separated from the spouse with whom you filed the joint return;
  2. You are widowed; or
  3. You have not lived in the same household as your spouse for at least a year before you request separation of liability relief.

Like Innocent Spouse Relief, Separation of Liability Relief must also be requested within two years of the IRS trying to collect the tax owed.

Generally, Separation of Liability Relief is not available when you had actual knowledge of the understatement of tax. Even where there is actual knowledge found, however, you may still qualify for relief if you were the victim of domestic violence before signing the erroneous tax return and you did not challenge the errors on the return for fear of retaliation.

Finally, there is Equitable Relief, which may apply if you don’t qualify for Innocent Spouse Relief or for Separation of Liability Relief. This is available where something was not properly reported on a tax return and this error is attributable to your spouse/former spouse, or if the amount of tax reported on the tax return is correct but the tax owed was not actually paid. This type of relief must be requested during the period the IRS can collect the tax from you.

To qualify for equitable relief, it must be found that under all the facts and circumstances, it would be unfair to hold you liable for the understatement of tax or the underpayment of tax. If the relief you’re requesting is 100% based on an item of your spouse/former spouse or unpaid taxes from your spouse/former spouse’s income, total relief will be considered. If, however, the tax liability is only partially attributable to your spouse/former spouse, relief will likely only be granted to you for the portion of the liability attributable to your spouse/former spouse.

These types of relief are not an Injured Spouse claim, which can arise when there is a joint tax return filed but one spouse owes past-due child support, federal agency non-tax debts, state income tax obligations, or certain unemployment compensation debts. In those cases, the injured spouse may be entitled to request a portion of their refund back.

Any of these types of relief are not available and will not be granted if any of the following apply:

  1. The IRS can prove that you and your spouse/former spouse transferred assets to each other as part of a fraudulent scheme, whether you planned to defraud the IRS or any other third party;
  2. The IRS can prove that at the time you signed the joint tax return, you had actual knowledge of the errors (and the domestic violence exception doesn’t apply); or
  3. The IRS can prove that your spouse/former spouse transferred property to you to avoid tax or paying taxes.

This blog is only intended as a general overview of a possible option available under the law and should not be relied upon as a legal opinion or as the position of the  IRS.  If you believe that you may be entitled to one of these forms of relief, you should contact an experienced tax attorney to discuss your options and potential relief.

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