Innocent Spouse
Dr. Zaheen and Mr. Ehsan married on February 1, 1998, one day after they met. Ten days later they left Pakistan and moved to the United States, where Dr. Zaheen established her medical practice. The couple had four children during the marriage.
In 2019 the couple withdrew $250,000 from Dr. Zaheen’s 401(k) account to pay down a home equity loan. Mr. Ehsan promised to replace the money in the retirement account within 30 days, but he did not. When Dr. Zaheed asked her husband about replacing the money, he said that she needed to trust him. She did not learn of the tax consequences of her husband’s failure to restore the 401(k) money until 2021, when the IRS demanded income taxes and penalties for the premature $250,000 retirement plan distribution.
Dr. Zaheen asked for innocent spouse relief from the tax liability, arguing that Mr. Ehsan controlled the household money and should be held responsible for his mismanagement. The IRS was ready to accept her request, but Mr. Ehsan intervened in the dispute, as he did not want sole responsibility for this large tax bill.
In the course of the trial, evidence showed that Mr. Ehsan had been physically and mentally abusive during the marriage. He had a short temper, had broken plates and glassware in front of the children if they were insufficiently obedient, and had on one occasional strangled Dr. Zaheen for eating chocolate. Mr. Ehsan had threated to harm their children if Dr. Zaheen refused sexual intercourse with him. He asserted the Dr. Zaheen was his property, that he was entitled to all of her earnings, and that all of her property was his.
Innocent spouse relief is usually denied to a spouse who had actual knowledge of the facts giving rise to the tax liability. Here, Dr. Zaheen knew about the withdrawal of funds from the retirement plan, though she did not fully understand the tax consequences. Under the circumstances, the Tax Court held that the level of abuse in the household negated Dr. Zaheen’s knowledge of the transaction. Innocent spouse relief was granted [Zaheen v. IRS, T.C. Memo 2026-7].
(March 2026)
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