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MOMMY'S GOING AWAY, BUT THE TAX COURT SAYS IT'S TEMPORARY FOR NOW

February 23, 2007

Cynthia Rowe was struggling as a single mom in 2002. She supported her two children in Eugene, Oregon with wages, unemployment benefits, welfare and food stamps. She then took a bold step in early June 2002 to secure long-term accomodations, shooting her brother-in-law in the head.

One thing led to another, and Ms. Rowe ended up with a life sentence for first-degree murder. Even so, she was attentive to her income tax obligations, filing a timely 2002 tax return claiming a refund under the earned income credit. She got her refund, but the IRS then wanted it back. The IRS said that her June incarceration meant she failed to "share the same principal place of abode" with her children for half of 2002 - one of the requirements to receive the credit.

The Tax Court decided, in effect, that she was innocent until proven guilty:

We find that an individual confined in jail after an arrest but before conviction is necessarily, but nonpermanently, absent from his or her home. Such an individual generally intends to return home, just as an individual in military service or afflicted by illness intends to return home once he or she is able. Thus, the necessary, nonpermanent absence of jail confinement is similar to those examples listed in the head of household regulations.

The moral? However dire the circumstances, it's always worthwhile to file your return on time.

Cite: Rowe, 128 T.C. No. 3.

UPDATE: The Tax Prof has more.

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