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Mr. & Mrs. Bahlo were married and filed a joint income tax return for 2003. They had a taxable gain on their primary residence sale (2003) which is stated in their divorce agreement for 2003. Husband is specifically stated as being responsible for income taxes owed for 2003-in their divorce of 2004.
The Franchise Tax Board came back 3 years ago and disallowed several basis calculations and disallowed self employment expenses and assessed Mr. Bahlo for the deficiency in the taxes owed for 2003. Mrs. Bahlo was unaware of this.
Mr. & Mrs. Bahlo divorced in 2004 Mr. Bahlo never paid the taxes and subsequently passed away in 2011. The Franchise Tax Board is now going after Mrs. Bahlo with assessments from the 2003 sale of the home. The FTB has also disallowed her initial innocent spouse application. Are there any cases in the state of California which are similar which will help Mrs. Bahlo's case against the Franchise Tax Board?
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