What do you do in a divorce when your spouse is a tax cheat?
If you get divorced, and your spouse is a tax cheat, you run the risk of becoming jointly liable for the unpaid taxes. Worse, you run the risk of prosecution for tax fraud. So what can you do?
The IRS has a provision called Innocent Spouse Relief. If you qualify, there are two distinct forms of help you can get:
- Innocent Spouse Relief - discharge of liability
- Separate Tax Liability
The first form of relief wipes out your tax debt in part or full. You must have not had any knowledge of the incorrect or fraudulently prepared tax returns. That means you cannot look like you were aware of any part of the return. Also, you must not have benefited from the hidden income. That means you cannot be driving a Mercedes and at the same time signing a tax return that show $200/week in income.
The second form of relief is slightly easier to get. If you qualify, the IRS will separate out the tax liability of your income from your spouse's hidden income. Most of the time this would have the effect of wiping out extreme tax bills and penalties.
The Bottom Line: Always be aware of these types of tax situations. The financial effect can be far worse than the divorce. Stop signing a joint return. File married-filing-separately. And the moment you suspect a potential tax liability, begin to separate your financial life from your spouse's financial life and then promptly file for divorce.
The Divorce Center can provide an experienced divorce attorney for your entire case or any individual part. Tampa, Pinellas, Pasco, Hernando County Divorce Attorney Howard Iken will give you personal attention, fast answers, and the loyal aggressive representation you need. We also offer a forms preparation service with lawyer review and consultation for reasonable prices. Check out our easysavr legal service. CONTACT US NOW or call 888-469-3486