[ghancock]

This isn’t the sort of thing I expect people to “get in trouble” for at the time of filing. I expect that years later, if the startup turns out to be worth something and the taxpayer is audited, the auditors will go through old paperwork and discover a very large amount of taxes they can collect.

[kentonv]

I think we understand that an auditor could, in theory, do that, but the question is whether auditors do, in practice, do it. The IRS is not supposed to be screwing people on technicalities like this, and a reasonable auditor should conclude that the spouse obviously would have signed had they known they needed to. Regulation isn't interpreted by computers, it is interpreted by humans who can make reasonable adjustments for these sorts of mistakes.

So, does anyone known of someone who actually got screwed by this in an audit? I'm sure it has happened often enough that at least someone out there has been audited who would be affected.

[cortesoft]

They would also need a court to agree with the ruling, and the fact that the person had no reasonable way to properly sign the document is likely to hold a lot of sway in court.

[google234123]

IRS much much prefers to go after actual criminal activity.