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WHAT A GUY (AND WHAT A LAWYER)

February 23, 2005

Some guys just don't know when to let go. Take Stanley Baumann.

Mr. Baumann got in trouble with the IRS because he tried to deduct gambling losses against the income from his drywall business. Under the tax law, gambling losses can only offset gambling income.

Mr. Baumann also got into trouble with his wife, Tomi. The Tax Court gives a taste of why she might have been upset:

Tomi provided information and documents to substantiate that Stanley physically assaulted her numerous times, that Stanley had threatened Tomi’s life with a shotgun during the divorce action, that he had tried to burn their house while she and her children were inside, that he was charged with arson, that he was taken to a psychiatric hospital after he attempted suicide with a shotgun, and that he had threatened the life of her older son (from a previous marriage).

Remember, it's absence that makes the heart grow fonder - not arson.

The IRS decided that Tomi was an "innocent spouse," and therefore shouldn't be on the hook for the understatement of income on the joint return.

Attorney Frederick O'Laughlin had been representing the couple in their tax battle, but when the couple split, he had to pick sides. He sided with Stanley. Frederick filed in Tax Court to keep Tomi on the hook for the couple's taxes. He argued that Stanley wasn't given enough opportunity to fight the innocent spouse relief administratively.

What with the arson and suicide threats and beatings and all, the Tax Court sided with Tomi.

Cite: Baumann v. Commissioner, TC Memo 2005-31

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