The taxpayer filed MFJ, recorded a schedule c on his or her tax return which included all of the activity for both of them. IRS found out he was single, but is only asking for the spouse that really wasn't a spouse to file his or her tax return. I am assuming the IRS made the changes on the taxpayer's original return, which is why he or she does not have to refile. You would have to look at whether or not they split the schedule c activity on the taxpayers new return. If they did not and the only change made was to make the filing single, then the spouse does not include the schedule c. If the IRS split the income, then the spouse needs to include her portion of the schedule c.
