It is extremely important for both parties entering into a marriage to understand the joint financial liabilities that come with matrimony. If someone enters into a marriage without fully knowing the extent of his/her partner’s financial situation with the IRS, he/she may find that IRS debt will apply to both persons in the marriage. During my talk with TJ McCormack last month on LA Talk Radio, we discussed the repercussions of marrying someone who has IRS debt and how this can affect your perfectly healthy stance with the IRS once you get married.
You can listen to excerpts from the interview here.
The Facts about Filing a Joint Return:
The minute that you and your spouse file a joint tax return, you’re attached at the hip; especially if you have bank accounts that have both names. The IRS will attach the bank account to both people. Therefore, if the wife is the only one in debt with the IRS, the husband’s money in the bank account will also be liable (it does not make a difference whether the wife has any money in the account; as long as her name and her husband’s names are both on the statements).
There are a number of things you can do to protect yourself from inheriting your spouse’s IRS debt:
If you’re contemplating marriage and your fiancé has a tax problem, file a prenuptial agreement and record it with the County Recorder. This is a community property stake in California, so you’ve got to be very careful. Or you can wait to get married after the debt problem has been resolved.
How You Can Qualify for Innocent Spouse Relief
If you had no idea about the financial activity of your spouse and how your spouse was manipulating the books, you can qualify for Innocent Spouse relief. This means:
- You did not share bank accounts—you had no access to his/her account activity
- Your spouse had a separate business that he/she operated independently
- You did not benefit in lifestyle from the extra money that was a result of tax manipulation
Once you file for an Innocent Spouse Claim, the IRS will send you a questionnaire which will verify the validity of your story. I also recently blogged about the sharing of financial information in innocent spouse cases.
Note: You cannot file an Innocent Spouse Claim if you are still married. You must be separated or divorced.
I deal with tax problems every day and this year alone, my firm has successfully negotiated hundreds of IRS settlements at a rate of $0.13 on the dollar. For a free, no-risk consultation, please call my office at 866-IRS-PROBLEMS (1-866-477-7762) or visit the Tax Resolution website.
More Tax Help, IRS News and Tax Relief Tips:
- There’s Still Hope if You Didn’t File Your Taxes: You Can Still Get Income Tax Relief and Avoid IRS Penalties
- Guidance on Sharing of Financial Information in Innocent Spouse Cases
- Learn How to File For Bankruptcy Correctly to Help Solve Tax Problems and Reduce IRS Debt
- Tax Help News: 13% of Americans Find Tax Evasion Acceptable as IRS Audits Increase
- Tax Help For Offer in Compromise Applicants: New IRS Changes to Processing
Tags: income tax relief, Innocent Spouse, IRS debt, IRS help, irs problems, LA Talk Radio, Michael Rozbruch, prenuptial agreement, tax attorney, tax expert, tax help, tax liability, tax resolution, tax resolution expert, tax resolution services, TJ McCormack