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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121585  
Subject: Re: Husband's Tax Deliquency Date: 7/7/2008 2:01 AM
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I make decent money (over $100K), and am working hard to invest and ensure I have proper insurance for my future child. My understanding is that I am not responsible for his taxes because this occurred prior to our marriage. However, I am uncomfortable with the situation - I don't want my family to owe money to the IRS. Additionally, we cannot file joint taxes and I would prefer to have my husband's name on our assets in case something does happen to me.

In case you don't know, I'm our resident retired IRS knuckledragging Collection thug.

There's a major piece of missing information. Do you live in a community property state? While it's true that you are not liable for your husband's separate tax debt, in community property states creditors, including the IRS, can reach community assets held in the non-liable spouse's name, including the spouse's earnings.

What makes you think you can't file jointly? I think you're being silly and costing yourselves money since filing a joint return now will not make you liable for his separate debt, and if there's a refund it can be apportioned per "injured spouse" rules so that "your" refund doesn't go to "his" tax debt. Please get back to me on this. I don't know when you were married, but if you have filed Married, Filing Separately for 2005 or later you can fix that and probably get some money back.

It seems that our next step is to file an offer in compromise. We are seeking an EA, but I wanted to get a second opinion from this group - we currently rent, and the only asset in my husband's name is his car (which is ~6 years old - probably worth $5K). Because my husband is not working, how will the IRS evaluate the situation? Will they take into account my financial situation because he is married and not working? We would like to offer $5K - do you think the IRS will accept this?

Again it comes down to whether you're in a community property state. If not IRS will look to only your husband's assets and income. They will attribute living expenses to the spouse paying them. In a community property state they will apply the state's community property rules to this analysis.

He sounds like a good candidate for an offer. There's way not enough information to offer an opinion as to the $5,000 amount.

Phil
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