One of the reasons the IRS is often hesitant to entertain “Innocent Spouse” defenses—that is, a spouse who claims that she doesn’t owe a huge tax bill because her husband, without her knowledge, cheated on their taxes—is that many married couples actually do collude in defrauding the government. Witness the case of Gerard and Betty Lessard, a Wichita, KS couple who owned a company called ProActive Health Care.
Back in 2004 (which shows how long it can take for tax cases to wend their way through the legal system), the Lessards had an income windfall of nearly $900,000 (the writer for the Topeka Capital-Journal doesn’t reveal where this money came from). When they finally got around to filing their 2004 taxes (in October of 2005), the Lessards neglected to report this income, cheating the government out of hundreds of thousands of dollars.
Now in their late 60s and early 70s, the Lessards are in real trouble. Gerald Lessard faces six months of community confinement followed by six months of home confinement, while Betty Lessard is on the hook for only six months of either community or home confinement. More onerously, the Lessards will jointly have to find a way to pay a court-ordered fine of nearly $700,000—well above what their tax bill would have been if they had reported their income in the first place.