So if I have 2 clients – now divorced, filing an Innocent Spouse for one spouse and filing a Currently not Collectible for the other which is on Social Security Disability, can I do this for each? Do I need a 7216?
I asked this at the conference, but I think a little further explanation is needed. This case has to do with a disability insurance paid to Spouse that once Spouse received the back pay from Social Security was to be repaid.
But it was not and the 1099-C was not received for the 2017 tax return per TP & Spouse, but was information in regards to this 1099-C was later on a letter from IRS for the 2017 TY. So, the innocent spouse filing is due to this unknown income at the time of filing, which I prepared. The TP & Spouse has divorced since the filing of the 2017 return. The IRS agent that I spoke to in regards to this situation recommended the filings of the Innocent Spouse for TP and Currently not Collectible for Spouse. I am in a very rural area and these people make less than $35k per year and not sure of how much another office will charge them. I am not charging them to assist them in this. My question is this, ethically can I assist? I do suppose they could take care of this themselves, at least the part of the currently not collectible. And if ethically I cannot, please tell me if it’s because I can’t represent each or is it because I prepared the return?