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her to report the embezzlement income on an amended return
because, he said, a judge would probably be more lenient in
sentencing her if she took responsibility for her actions. But
section 1.6013-1(a)(1) of the income tax regulations created a
problem.1 It prohibits spouses who have already filed a joint
return for a particular year from filing amended returns changing
their status to married-filing-separately once the deadline to
file returns has passed. The due date for the Billingses’ 1999
tax year--April 15, 2000--was long past, and so David signed the
amended return.
That return showed an increase in taxable income, and an
increase in tax of over $16,000. When David signed the amended
return, he knew that neither he nor his wife expected to be able
to pay this increased tax. In 2002, the Billingses filed for
bankruptcy and received a discharge, which affected neither
Rosalee’s obligation to repay the money she’d embezzled nor her
own liability for the unpaid 1999 taxes. 11 U.S.C. secs.
523(a)(1), 507(a)(8) (2000). David retired and began collecting
a pension--although, as of the date the case was originally
submitted, he continued to work two other jobs. He and his wife
have filed timely tax returns for later years as they came due.
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code and regulations in effect for the year
in issue.
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