Repaying a COVID-Related Distribution

Do you remember a tax break in 2020 that allowed you to take (up to) $100,000 from your IRA or your employer retirement plan? These were called “coronavirus-related distributions,” or CRDs in the lingo. In and of itself, the provision was not remarkable. What was remarkable is that one was allowed three years to return some, all, or none of the money to the IRA or employer plan, as one wished.

I was thinking recently that I do not remember seeing 2021 individual returns where someone returned the money.

Granted, we have a flotilla of returns on extension here at Galactic Command. I may yet see this beast in its natural state.

Let’s go over how this provision works.

To make it easy, let’s say that you took $100,000 from your 401(k) in 2020 for qualifying COVID-related reasons.

You had an immediate binary decision:

·      Report the entire $100,000 as income in 2020 and pay the taxes immediately.

·      Spread the reporting of the $100 grand over three years – 2020, 2021 and 2022 - and pay taxes over three years.

There was no early-distribution penalty on this distribution, which was good.

You might wonder how paying the tax immediately could be preferable to paying over three years. It could happen. How? Say that you had a business and it got decimated by COVID lockdowns. Your 2020 income might be very low – heck, you might even have an overall tax loss. If that were the case, reporting the income and paying the tax in 2020 might make sense, especially if you expected your subsequent years’ income to return to normal levels.

What was a COVID-related reason for a distribution?

The easy ones are:

·      You, a spouse or dependent were diagnosed (and possibly quarantined) with COVID;

·      You had childcare issues because of COVID;

·      You were furloughed, laid-off or had work hours reduced because of COVID.

Makes sense. There is one more:

·      You experienced other “adverse financial consequences” because of COVID.

That last one has an open-gate feel to me. I’ll give you an example:

·      You own rental cabins in Aspen. No one was renting your cabins in 2020. Did you experience “adverse financial consequences” triggering this tax provision?

You have – should you choose to do so – three years to put the money back. The three-year period starts with the date of distribution, so it does not automatically mean (in fact, it is unlikely to be) December 31^st three years later.

The money doesn’t have to return to the same IRA or employer plan. Any qualifying IRA or employer plan will work. Makes sense, as there is a more-than-incidental chance that someone no longer works for the same employer.

 Let’s say that you decide to return $50 grand of the $100 grand.

The tax reporting depends on how you reported the $100 grand in 2020.

Remember that there were two ways to go:

·      Report all of it in 2020

This is easy.

You reported $100 grand in 2020.

When you return $50 grand you … amend 2020 and reduce income by $50 grand.

What if you return $50 grand over two payments – one in 2021 and again in 2022?

Easy: you amend 2020 for the 2021 and amend 2020 again for the 2022.

Question: can you keep amending like that – that is, amending an amended?

Answer: you bet.

·       Report the $100 grand over three years.

This is not so easy.

The reporting depends on how much of the $100 grand you have left to report.

Let’s say that you are in the second year of the three-year spread and repay $30,000 to your IRA or employer plan.

The test here is: did you repay the includable amount (or less) for that year?

If yes, just subtract the repayment from the includable amount and report the difference on that year’s return.

In our example, the math would be $33,333 - 30,000 = $3,333. You would report $3,333 for the second year of the spread.

If no, then it gets ugly.

Let’s revise our example to say that you repaid $40,000 rather than $30,000.

First step: You would offset the current-year includable amount entirely. There is nothing to report the second year, and you still have $6,667 ($40,000 – 33,333) remaining.

You have a decision.

You have a year left on the three-year spread. You could elect to carryforward the $6,667 to that year. You would report $26,666 ($33,333 – 6,667) in income for that third and final year.

You could alternatively choose to amend a prior year for the $6,667. For example, you already reported $33,333 in 2020, so you could amend 2020, reduce income by $6,666 and get an immediate tax refund.

Which is better? Neither is inherently better, at least to my thinking. It depends on your situation.

There is a specific tax form to use with spreads and repayments of CRDs. I will spare us the details for this discussion.

There you have it: the ropes to repaying a coronavirus-related distribution (CRD).

If you reflect, do you see the complexity Congress added to the tax Code? Multiply this provision by however many times Congress alters the Code every year, and you can see how we have gotten to the point where an average person is probably unable to prepare his/her own tax return.

 

Wiping Out An Inherited IRA

I came across an unfortunate tax situation this week.

It has to do with IRAs and trusts.

More specifically, naming a trust as a beneficiary of an IRA.

This carried a bit more punch before the tax law change of the SECURE Act, effective for 2020. Prior to the change, best planning for an inherited IRA frequently included a much younger beneficiary. This would reset the required distribution table, with the result that the monies could stay in the IRA for decades longer than if the original owner had lived. This was referred to as the “stretch” IRA. The SECURE Act changed that result for most beneficiaries, and now IRAs have to distribute – in general – over no longer than 10 years. 

Trusts created a problem for stretch IRAs, as trusts do not have an age or life expectancy like people do. This led to something called the “look-through” or “conduit” trust, allowing one to look-through the trust to its beneficiary in arriving at an age and life expectancy to make the stretch work.

The steam has gone out of the conduit trust.

One might still want to use a trust as an IRA beneficiary, though. Why? Here is an example:

The individual beneficiary has special needs. There may be income and/or asset restrictions in order to obtain government benefits.

What is the point, you ask? Doesn’t the IRA have to distribute to the individual over no more than 10 years?

Well … not quite. The IRA has to distribute to the trust (which is the IRA beneficiary) over no more than 10 years. The trust, in turn, does not have to distribute anything to its individual beneficiary.

This is referred to as an accumulation trust. Yes, it gets expensive because the trust tax rates are unreasonably compressed. Still, the nontax objectives may well outweigh the taxes involved in accumulating.

There is something about an inherited IRA that can go wrong, however. Do you remember something called a “60-day rollover?” This is when you receive a check from your IRA and put the money back within 60 days. I am not a fan, and I can think of very few cases where I would use or recommend it.

Why?

Because of Murphy’s Law, what I do and have done for over 35 years.

You know who can do a 60-day rollover?

Only a surviving spouse can use a 60-day rollover on an inherited IRA.  

You know who cannot do a 60-day rollover on an inherited IRA?

Anyone other than a surviving spouse.

It is pretty clear-cut.  

I am looking at someone who did not get the memo.

Here are the highlights:

·      Husband died.

·      The wife rolled the IRA into her own name (this is a special rule only for surviving spouses).

·      The wife died.

·      A trust for the kids inherited the IRA.

No harm, no foul so far.

·      The kids wanted to trade stocks within the IRA.

So it begins.

·      The IRA custodian told the kids that they would have to transfer the money someplace else if they wanted to trade.

No prob. The kids should have the IRA custodian transfer the money directly to the custodian of a new IRA that will let them trade to their heart’s content.

·      The kids had the IRA custodian transfer the money to a non-IRA account owned by the trust.

And so it ends.

The kids were hosed. They tried a Hail Mary by filing a private letter request with the IRS, asking for permission to put the money back in the IRA. The IRS looked at the tax law for a split second … and said “No.”

The IRS was right.

And, as usual, I wonder what happened with calling the tax advisor before moving around not-insignificant amounts of money.  

One can point out that taxes would have been payable as the kids withdrew money, and an inherited IRA has to distribute. If mom died in 2020 or later, the IRA would have to be distributed over no more than 10 years anyway.

Still, 10 years is 10 years. If nothing else, it would have given the kids the opportunity to avoid bunching all IRA income into one taxable year.

Not to mention paying for a private letter ruling, which is not cheap.

I hope they enjoy their stock trading.

The cite for the home gamers is PLR 202125007.

Withdrawing A Tax Court Petition

 

We have a case coming up in the Tax Court.

Frankly it should never have gone this far. Much of it was COVID, I suspect. However, some of it was the IRS dropping the ball.

What set this off was someone dying. His employer had a life insurance policy on him. I suspect that this came as a surprise to his employer, who probably thought all along that the employee owned the policy with the employer paying the premiums. This would be a “split dollar” arrangement. The taxation of split dollar plans became trickier in the mid aughts, but these arrangements have been around for a long time. 

The employee died. The company received the proceeds. The company intended for the widow to receive the proceeds. How did the company get the proceeds to the widow?

They botched is what they did.

They tried to correct the botch by amending a Form 1099.

Our client is the widow, and she is being chased by the IRS. I reviewed the history of the transaction, the original and amended 1099, e-mails galore.

I have been trying to contact the IRS on the case. I even reached out to the clerk for Judge Morrison (at the Tax Court) for an assist. She was extremely helpful, but getting a response – or a pulse – from the IRS has been frustrating.

Until this week.

It is amazing how quickly some issues can be resolved if people can just talk.

The IRS understood our argument. They were willing to compromise, except for one thing.

The company never filed the amended 1099 with the IRS.

Explains why the IRS was digging in its heels.

Mind you, we can correct this – now that we know. We could also have corrected this long ago and not involved the Tax Court.

We will never appear before the Court.

Procedure here is important. Both the IRS and we will tell the Court the matter has been settled. The Court will be happy to move on.   

By contrast, what happens if we unilaterally pull out of Tax Court?

Bad things.

The seminal case goes back to 1974.

The IRS came after William Ming. Whatever was going on, the IRS was going after the fraud penalty.

There was back and forth. Mr Ming died. The IRS eventually showed some leeway on the fraud issue.

That caught the estate’s attention.

The estate tried to withdraw its case. They may have wanted a jury, and the Tax Court does not have a jury.

Here is the Court:

It is now settled principle that a taxpayer may not unliterally oust the Tax Court from jurisdiction which, once invoked, remains unimpaired until it decides the controversy.”

There is a Hotel California vibe here: the Tax Court will hold against you should you withdraw. This triggers the legal doctrine of res judicata, and you then cannot relitigate the issue in another court.

You can leave by winning, losing or settling. What you cannot do is walk out.

Our case this time for the at-home tax historians was Estate of Ming 62 T.C. 519.

Another IRA-As-A-Business Story Gone Wrong

 

I am not a fan.

We are talking about using your IRA to start or own a business. We are not talking about buying stock in Tesla or Microsoft; rather we are talking about opening a car dealership or rock-climbing facility with monies originating in your retirement account. The area even has its own lingo – ROBS (Rollover for Business Start Ups), for example - of which we have spoken before.

Can it be done correctly and safely?

Probably.

What are the odds that it will not be done – or subsequently maintained - correctly?

I would say astronomical.

For the average person there are simply too many pitfalls.

Let’s look at the Ball case. It is not a standard ROBS, and it presents yet another way how using an IRA in this manner can blow up.

During 2012 Mr Ball had JP Morgan Chase (the custodian of his SEP-IRA) distribute money.

COMMENT: You have to be careful. The custodian can send the money to another IRA. You do not want to receive the money personally.

Mr Ball initiated disbursements requests indicating that each withdrawal was an early disbursement ….

         COMMENT: No!!!

He further instructed Chase to transfer the monies to a checking account he had opened in the name of a Nevada limited liability company.

         COMMENT: That LLC better be owned by the SEP-IRA.

Mr Ball was the sole owner of the LLC.

         COMMENT: We are watching suicide here.

Mr Ball had the LLC loan the funds for a couple of real estate deals. He made a profit, which were deposited back into the LLC.

At year-end Chase issued Forms 1099 showing $209,600 of distributions to Mr Ball.

         COMMENT: Well, that is literally what happened.

Mr Ball did not report the $209,600 on his tax return.

COMMENT: He wouldn’t have to, had he done it correctly.  

The IRS computers caught this and sent out a notice of tax due.

COMMENT: All is not lost. There is a fallback position. As long as the $209,600 was transferred back into an IRA withing 60 days, Mr Ball is OK.

ADDITIONAL COMMENT: BTW, if you go the 60-day route – and I discourage it – it is not unusual to receive an IRS notice. The IRS does not necessarily know that you rolled the money back into an IRA within the 60-day window.

This matter wound up in Tax Court. Mr Ball had an uphill climb. Why? Let’s go through some of technicalities of an IRA.

(1) An IRA is a trust account. That means it requires a trustee. The trustee is responsible for the assets in the IRA.

Chase was the trustee. Guess what Chase did not know about? The LLC owned by Mr Ball himself.

Know what else Chase did not know about? The real estate loans made by the LLC upon receipt of funds from Chase.

If Chase was the trustee for the LLC, it had to be among the worst trustees ever. 

(2)  Assets owned by the IRA should be named or titled in the name of the IRA.

Who owned the LLC?

Not the IRA.

Mr Ball’s back was to the wall. What argument did he have?

Answer: Mr Ball argued that the LLC was an “agent” of his IRA.

The Tax Court did not see an “agency” relationship. The reason: if the principal did not know there was an agent, then there was no agency.

Mr Ball took monies out of an IRA and put it somewhere that was not an IRA. Once that happened, there was no restriction on what he could do with the money. Granted, he put the profits back into the LLC wanna-be-IRA, but he was not required to. The technical term for this is “taxable income.”

And – in the spirit of bayoneting the dead – the Court also upheld a substantial underpayment penalty.

Worst. Case. Scenario.

Is there something Mr Ball could have done?

Yes: Find a trustee that would allow nontraditional assets in the IRA. Transfer the retirement funds from Chase to the new trustee. Request the new trustee to open an LLC. Present the real estate loans to the new trustee as investment options for the LLC and with a recommendation to invest. The new trustee – presumably more comfortable with nontraditional investments – would accept the recommendation and make the loans.

Note however that everything I described would take place within the protective wrapper of the IRA-trust.

Why do I disapprove of these arrangements?

Because – in my experience – almost no one gets it right. The only reason we do not have more horror stories like this is because the IRS has not had the resources to chase down these deals. Perhaps some day they will, and the results will probably not be pretty. Then again, chasing down IRA monies in a backdrop of social security bankruptcy might draw the disapproval of Congress.

Our case this time was Ball v Commissioner, TC Memo 2020-152.

Taxing A Nondeductible IRA

Let’s say that you are married. Together you and your spouse earn $200,000.

BTW, congratulations. You have done well. Not Thurston Howell III well, but well enough that Congress considers you wealthy. Then again, one of the last times I paid attention Congress was working on a 10-percent approval rating.

How much of a Roth contribution can you make?

You know you can put away $5,500. If you are age 50 or over you can put away another $1,000. There are two of you – you and your spouse.

So, how much can you contribute?

Would you believe nothing?

Yep, zero. You make too much money.

How’s Lovey, Thurston?

And there is our segue to the nondeductible IRA. The “nondeduct” still exists, but it has been eclipsed (and rightfully so) by the Roth.

The nondeductible preceded the Roth. The idea is that you get no deduction going in, but only a percentage is taxable coming out.

Here is an example. You fund a nondeductible for a decade. You contribute $55,000. Years later, it is worth $550,000 and you start taking withdrawals. How is this taxed?

$55,000 divided by $550,000 is 10 percent. The inverse – 90 percent – is your gain. You pull out $20,000. Your taxable amount is $20,000 times 90% or $18,000.

This thing is a distant cousin to the Roth, where the whole $20,000 would be nontaxable. You would always Roth rather than nondeduct – if you can.

But you make $200 grand. No Roth for you.

But you can nondeduct. It is one thing the nondeduct brings to the party – there is no income limit. Make a zillion dollars and you can still put $5,500 into your nondeductible IRA.

If you do, the IRS wants you to attach a form to your return – Form 8606. It alerts them that a nondeductible exists, and it also reminds you of your accumulated contributions decades later when you begin withdrawals. You are going to need that number to calculate your percentage.

I was looking at case where the taxpayer had a nondeductible IRA and it was decades later. He had to calculate the taxable percentage, but he had never completed Form 8606 to do the calculation or to alert the IRS.

He withdrew $27,745. He did not report the $27,745 because it came from his nondeductible IRA.

COMMENT: And we know this is wrong. He was thinking of a Roth, where the whole thing is nontaxable. This is a nondeductible, and only a percentage is nontaxable.

The IRS wanted to tax it all. He had – gasp! – failed to attach…the…proper… form.

Problem was; he did not have the best documentation. No doubt it would been better to file and update that 8606 as he went along.

The Court looked at available documentation, which was sparse.

(1) There was a Citibank summary statement sometime around 1998 showing cost and value.

(2) The taxpayer had Forms 5498 from 2007 through 2013. If you have ever funded an IRA, then you have received one of these. Form 5498 shows your contributions for the previous calendar year. His 5498s showed that he put in no fresh money from 2007 onward.

(3) Taxpayer showed that he was high-income for the years before 2007 when he made his IRA contributions.

The Court gave him the benefit of the doubt. It knew that the IRA account was not a Roth. That left only deductible and nondeductible IRAs. If he was high income and covered by a plan at work, he could not have made a deductible IRA contribution. By process of elimination, the IRA had to be nondeductible.

He was not in the clear though. The Court reminded him that a nondeductible percentage of zero is almost impossible, as the IRA would have to go down in value. He had to calculate his percentage and would have taxable income, but not as much as the IRS wanted.

I suspect I will see this fact pattern as boomers with nondeductible IRAs enter retirement. The Tax Court has given us guidance on how to work around poor recordkeeping.

The case for the home gamers is Shank v Commissioner.

What’s Fair Got To Do With It?

I am reading a tax case with an unfortunate result.

It does not seem that difficult to me to have planned for a better outcome.

I have to wonder: why didn’t they?

Let’s set it up.

We have a law firm in New York. There is a “heavy” partner and the other partners, which we will call “everybody else.” The firm faced hard times, and “everyone else” kept-up their bleed rate (the rate at which they withdraw cash), with the result that their capital accounts went negative.

COMMENT: A capital account is increased by the partner’s share of the income and reduced by cash withdrawn by said partner. When income goes down but the cash withdrawn does not, the capital account can (and eventually will) go negative. 

Let’s return to our heavy partner.

He was concerned about the viability of the firm. He was further concerned that New York law imposed on him a fiduciary responsibility to assure that the firm be able to pay its bills. I applaud his sense of responsibility, but I have to point out that any increased uncertainty over the firm’s capacity to pay its bills might have something to do with “everybody else” taking out too much cash.

Just sayin’.

Our partner’s share of firm income was almost $500 grand.

Problem is that the cash did not follow the income. His “share” of the income may have been $500 grand, but he left around $400 grand in the firm to make-up for the slack of his partners.

And you have one of those things about partnership taxation:   

·      The allocation of income does not have to follow the allocation of cash.

There are limits to how far one can push this, of course.

Sometimes the effect is beneficial to the partner:

·      A partner tales out more cash than his/her share of the income because the partnership owns something with big-time depreciation. Depreciation is a non-cash expense, so it doesn’t affect his/her distribution of cash.

Sometimes the effect is deleterious to the partner:

·      Our guy took out considerably less cash than the $500K income.

Our guy did not draw enough cash to even pay the taxes on his share of the income.

OBSERVATION: That’s cra-cra.

What did he do?

He reported $75K of income on his tax return. Seeing how did not receive the cash, he thought the reduction was “fair.”

Remember: his partnership K-1 reported almost half a million.

The number on his personal return did not match what the partnership reported.

COMMENT: By the way, there is yet one more form to your tax return when you do not use a number reported by a partnership. The IRS wants to know. He might as well just have booked the audit.

Sure enough, the IRS sent him a notice for over $140,000 tax and $28,000 in penalties.

Off to Tax Court they went.

And he had … absolutely … no … chance.

Partnerships have incredibly flexible tax law. There is a reason why the notorious tax shelters of days past were structured around partnerships. One could send income here, losses there, money somewhere else and muddy the waters so much that you could not see the bottom.

In response, Congress and the IRS tightened up, then tightened some more. This area is now one of the most horrifying, unintelligible stretches in the tax Code.  It can – with little exaggeration – be said that all the practitioners who truly understand partnership tax law can fit into your family room.

Back to our guy.

The Court did not have to decide about New York law and fiduciary responsibility to one’s law firm or any of that. It just looked at tax law and said:

Your income did not match your cash. You set this scheme up, and – if you did not like it – you could have changed it. Once decided, however, live with your decision.

Those are my words, by the way, and not a quote.

Our law partner owed the tax and penalties.

Ouch and ouch.

I must point out, however, that the law firm’s tax advisors warned our guy that his “fiduciary” theory carried no water and would be disregarded by the IRS, but he decided to proceed nonetheless. He brought much of this upon himself.

What would I have recommended?

For goodness’ sake, people, change the partnership agreement so that the “everybody else” partners reported more income and our guy reported less. It is fairly common in more complex partnerships to “tier” (think steps in a ladder or the cascade of a fountain) the distribution of income, with cash being the second – if not the first – step in the ladder. The IRS is familiar with this structure and less likely to challenge it, as the movement of income would make sense.

Another option of course would be to close down the law firm and allow “everybody else” to fend for themselves.

I would argue that my recommendation is less harsh.

Are You Automatically Liable For Taxes On a Fraudulent IRA Withdrawal?

Sometimes people pursuing a divorce do stupid things.

I am looking this afternoon at Roberts v Commissioner.

The first thing I am thinking is that the wife will be fortunate to not be criminally charged. The second thing I am thinking is that the IRS could not present a more unfriendly face if they cast polar bears adrift on ice floes.

The Roberts in the case is the husband (H).

Roberts and his wife (W) married in 1990. They separated in 2008, permanently separated in 2009 and divorced in 2010.

Roberts and his wife kept joint bank accounts. After they separated, W kept the account at Washington Mutual and he kept his account at Harborstone. He did not have a checkbook for, write checks on or make withdrawals from Washington Mutual. In short, he had no idea about that account, despite the fact that his name was still on it.

In September 2009 one of his IRA custodians received a faxed withdrawal request for $9,000. The fax came from the company for which W worked. Coincidence, surely. The request was signed, but it was not signed the way Roberts normally signed his name.

A second IRA custodian also received two withdrawal requests, the first for $9,000 and the second for $18,980.

All the monies were deposited to that Washington Mutual account.

This took place over a two-month period. During that stretch, the wife deposited approximately $4,000 from her paycheck. She however spent over $41,000 from the account. The Court asked her about this discrepancy:

“We do not find credible [the wife’s] testimony that she was unaware of the sources of the deposits made to the Washington Mutual account when, in many instances, the deposits dwarfed the account’s balance at the time.”

Roberts let his wife prepare the 2008 tax return. Why not? She had prepared the returns for prior years.

She filed her return as “married filing separately.”

She filed his return as “single.”

She decreased the amount of his W-2 by $3,000. She increased his withholding by $3,000.

And she had his refund deposited to her bank account at Washington Mutual.

Roberts never saw the tax return.

You have figured out what was happening, of course.

Roberts continued oblivious to all this until he receives those pesky Forms 1099-R from the IRA custodians. Surely, they made a mistake. Alternatively he was the victim of a theft, he reasoned.

As the divorce grinds on he learned the truth of the matter. The divorce court considered the withdrawals when separating the property between the spouses.

In 2010 the IRS notified Roberts that they want almost $14,000 in tax and approximately $3,300 in penalties.

To say that the IRS took a strict reading of the tax law is to understate things. They argued: 

(1)  The income was his because he was the owner of the IRA accounts.

(2)  The monies were deposited into Washington Mutual, a jointly owned account.

(3)  The monies were used to pay for “family” expenses.

(4)  He never attempted to return the monies to the IRAs, even after he learned of the withdrawals.

Because of all this, the IRS argued that Roberts had unreported income in 2008.

It is pretty easy to tell that the Tax Court knew that the wife was lying. The Court also was brooking little patience for the IRS’ hyper-technical reading of the law, such as:

Roberts must include in income the amounts withdrawn from his IRAs even though he did not consent nor was he aware the distributions occurred.

Then the IRS trotted out two Tax Court decisions in Bunney and Vorwald.

In Bunney the IRS argued that the recipient of an IRA distribution was automatically the taxable party. 

COMMENT: The Court did not accept that argument in that case. Why would they do so now?  

In Vorwald the Court decided that a mandatory IRA distribution pursuant to a court-ordered garnishment for child support was income to the taxpayer.

            COMMENT: The IRS made more sense with this cite.

The problem with Vorwald is that the taxpayer had a legal obligation, and his IRA account was drained pursuant to that legal obligation. In the instant case Roberts was – essentially – robbed. He did not know that his wife was taking out monies to set up her post-divorce household, with a vacation sprinkled in.

The IRS then brought up their (in my opinion) best argument. In Washington state (where Roberts and his wife resided), an individual must discover and report unauthorized signatures within one year – essentially, a one-year statute of limitations.  Roberts did not do that. Granted, the withdrawals were taken into consideration when dividing marital property, but Roberts did not press for return of the monies.

And the Court did something unexpected: it paused. The IRS had a valid point. However, if there was a one-year statute of limitations, then Roberts had until 2009 to press his case. The Court looked at the tax years the IRS was challenging: year 2008 only. No year 2009.

Oops, said the Court. Sorry IRS. You flubbed.

The Court dismissed any taxes and penalties attributable to the IRA mess. It did allow taxes and penalties attributable to other minor issues on Roberts’ tax return.

We sometimes used to include a moral when reviewing tax cases. What would be the moral for today’s discussion? How about …

If you are divorcing, you may want to separate your finances, including your bank account – and your tax return – from the person you are divorcing.

Just saying.