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When You Get Married to Someone with Tax Problems

Love often happens accidentally and has a mind of its own.  Naturally when you find your perfect match, you choose to take the next big step- marriage.  The success or failure of this important relationship hinges on many factors including views on finances, parenting, and spirituality, among others.  Therefore, it is imperative that the couple has deep discussions in order to ensure both are on the same page and have the same expectations.  There is still another complication that could possibly affect you new relationship:  your future spouse may be carrying a tax liability.  Now what?

Because each couple’s financial woes are different and the scenarios behind tax problems can be numerous and complicated, it is often sensible to seek the advice of a tax attorney in order to find out in what ways couples could be held responsible and what individual repayment options exist.  The IRS is well known for its mercilessness in collecting what funds are owed to it, and the ways collections could occur are numerous.  The last thing you want is to be unprepared when the agents come calling.

Generally speaking, once you enter matrimony your finances and your spouse’s finances become one and the same in the eyes of the IRS; consequently, you and your spouse are responsible for the income taxes you both owe.  Before the alarm bells go off though, you should know that the IRS does offer a couple of ways to help you if your spouse owes back taxes.  First, the tax obligation is not legally yours, so you can seek relief under the innocent spouse option, which can be filed on Form 8857.  This shelter can apply under various circumstances, one of which is when tax debt was incurred by the other spouse prior to marriage.

Another way to help is the injured spouse option, which is filed on Form 8379.  If the criteria are met, the innocent spouse could still receive a tax refund.  Otherwise, the IRS would typically keep the refund and apply it to the outstanding debt.  With both of these IRS relief alternatives there are certain requirements that need to be met and particular strategies that should be utilized in order to get safeguards and optimize your position.  There could also be some additional complications with tax debt if you happen to live in a community property state.

Some other aspects to be aware of is that the IRS is notorious for going after a debtor’s bank account funds for unpaid taxes.  Therefore, abstaining from opening up a joint account until either your spouse’s tax debt is paid or a payment plan option is established would be your best bet.   In the same regard, you should also avoid entering into a mortgage or the purchase of property on a joint basis is also a wise choice because the asset may be subjected to a lien in the future.

Matrimony can be a challenging endeavor and throwing a tax liability into the mix can create even more difficulties.  If you want to start off on the right foot, our professionals at Dallo Law Group can provide comprehensive tax advice before you get hitched.  You owe it to yourself and the new relationship to understand your rights with the IRS and the various repayment plans the agency offers in order to efficiently reach an end with the tax liability.  Our attorneys have successfully represented clients in the areas of innocent spouse and we are confident we can help you.  Reach out to us for a free consultation:  619-795-8000.