Alexis and Terry Have Been Married Five Years and File

question 418

Essay

Alexis and Terry have been married five years and file joint tax returns. Alexis began embezzling funds from her employer during the third year of their marriage. Last year, Alexis suddenly left the country and Terry does not know where she is. In the current year, Terry learned that the IRS had assessed him $27,000 in unpaid taxes due to Alexis's embezzlement. What tax issue(s) are present in Terry's situation? What questions would you ask Terry to determine his appropriate response to the IRS?

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Definitions:

Effectiveness

The degree to which something achieves its intended result or successfully produces a desired outcome.

Incremental Budgets

A budgeting method that involves making small adjustments to existing budgets or expenditures, often based on inflation or previous performance.

Anticipated Income

Anticipated income is the amount of money expected to be received in the future, from sources like work wages, investments, or other revenue streams.

Production and Consumption

The processes of creating goods and services (production) and using or purchasing them (consumption).