433 Analysis- Taxpayer lives with Fiance

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    Liz Castro

    The book goes over a case study for one spouse liable. However, I have a case where the tax payer lives with his fiance and his mom takes care of his two daughters (daughters do not live with taxpayer, he sends mom child support voluntarily not court ordered).
    Will the IRS allow the 433 analysis as a household of 4 even though:
    1. Taxpayer is not legally married. Only lives with fiance.
    2. Daughters don’t live with him they live with his mom.

    If not, if I submit the 433 omitting fiance’s income and expenses and including a statement disclosing the fiancé’s information will IRS accept it. Fiance’s income about 80k a year. Both Taxpayer and Finance share the checking account. Taxpayer works very little and lives off student loans. He is in medschool. Taxpayer incurred debt for prior years because he had worked as contractor and never paid the SE taxes.

    Presently, I am conducting the 433 analysis on both scenarios:
    -Taxpayer Income and expenses only vs. 433 analysis as a household of 4.

    Eric Green

    Its complicated but I think:
    1. It is a household of two and the joint expenses need to be allocated between the taxpayer and Fiance;
    2. The child support paid to the mom is debatable – the IRS will try to refuse it because it is not court ordered but he is legally responsible to support his children. I would consider looking at the state child support laws and see if there is a minimum by law and use that as the basis for allowing these payments.

    Liz Castro

    Thank you

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