If you are considering divorce or are embroiled in a dispute, chances are that the a soon-to-be ex’s tax dilemmas will be the furthest thing from your mind. And who can blame you? With your concerns centering on where the kids will live and where they will go to school, future tax problems are far down the list.
Despite this, divorcees should know that they can still be held liable years after a divorce decree is issued, if there are unpaid taxes stemming from tax years when the parties were married. Also, if a former spouse is accused of tax fraud, both spouses can possibly be held liable.
If you find yourself in this situation, you can take solace in knowing that you can apply for equitable relief. This essentially is a request for leniency from the IRS because you as a former spouse were not actively involved in preparing a fraudulent return. Because of this, you were not actually committing fraud since you didn’t know, or had any reason to know, that the return you signed was actually fraudulent.
There are a number of situations where innocent spouses could be relieved of liability. Abused spouses who had nothing to do with the preparation of a fraudulent return are prime candidates for leniency. Further, spouses who were not privy to a spouse’s financial crimes through fraudulent business practices may seek a release from liability.
If you have questions about future tax liability after your divorce, an experienced family law attorney can advise you.