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JasonM23
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In the state of Florida, a husband and wife file joint-returns

Customer Question

In the state of Florida, a husband and wife file joint-returns for years. During a divorce, the husband makes a estimated tax payment of $400,000 either "married filing separately" or "single". He then steals the rest of the marital assets and leaves the country. He never even files his taxes. The wife is going to file her taxes "married filing separately". She has a court order stating that the estimated payment must be split 50/50. Shouldn't she be allowed to apply 50% of the estimated tax payment made by the husband to her taxes?
Submitted: 5 years ago.
Category: Business Law
Expert:  JasonM23 replied 5 years ago.
HelloCustomer

The IRS is not obligated to follow the directions of any court order regarding tax credits, and how they should be allocated between spouses.

If the husband filed the Form 1040-ES and only indicated his name and social security number on that form, then the wife would not be entitled to claim any portion of that estimated payment on her own separate tax return.

If this was helpful please press the Accept button.

Thank youCustomer and let me know if you have more questions.

Customer: replied 5 years ago.

Isn't the state of florida an equitable distribution state?

Is there a department at the IRS or some advocate i could talk to when it comes to a tax issue like this? Criminal department perhaps?

Expert:  JasonM23 replied 5 years ago.
Hello againCustomer

Can you please tell me if the husband and wife were still married at the end of the tax year in which this payment was made, or were they divorced by that time?

Expert:  JasonM23 replied 5 years ago.
Hello againCustomer

The only reason that I asked if the husband and wife were still legally married at the end of the year in which this tax payment was made, is because the wife would then still qualify to file a joint return with her husband, and the entire estimated tax payment would then apply against their joint tax liability. Of course the husband must be in agreement to file the joint return.

The fact that FL is an equitable distribution state only applies to how marital assets or liabilities are divided in the case of a divorce. It is a state statute, and again, not something that the IRS is bound by.

If the $400,000 tax payment which the husband made was made using funds that belonged to both spouses, then the wife may have a civil suit against the husband to recoup her share of that money. But this is not something the IRS will involve themselves in.

As long as the 1040-ES was submitted with only the husband's name and social security number, then the only way the wife can receive any credit for this tax payment is by filing a joint return with her husband for the year this occured.

Contacting the IRS criminal investigation unit will not help here, because the husband has done nothing criminally wrong by filing an estimated tax payment in his name only. You can talk to a taxpayer advocate in your area, but they will tell you the same thing, which is that the only way the wife will receive any credit for this payment is by filing a joint return with her husband for that year.

If this was helpful please press the Accept button.

Thank youCustomer

Customer: replied 5 years ago.

The husband wired millions out of the country and used to irs to hide $400,000. This was done after a judge ordered him not to do so. Isn't this money laundering or fraudulent tranfers? Wouldn't that make it criminal?

Expert:  JasonM23 replied 5 years ago.
Hello againCustomer

First, you did not mention in your first post anything about the millions of dollars being wired outside of the country. The only thing you mentioned was the $400,000 estimated tax payment he made in his name, and then leaving the country with the rest of the marital assets. If the rest of those marital assets amounted to millions of dollars, then I assume that he would be subject to criminal charges, but that is really a question for an attorney.

Your question was posted in the tax forum, and that is the only area where I have experience. I am not experienced in criminal law. I can only tell you that from a tax standpoint, the IRS will not allow the wife to claim the $400,000 tax payment which was made as a credit on her return.

In your original post you said that the wife had a court order which said she could claim the tax credit 50/50. I have to assume that she tried doing this already and was denied, otherwise you would not be posting this question.

If the husband ends up being prosecuted and is ordered to make restitution to the wife, I am sure that the $400,000 will be included in the assets he is to repay her. But again, this will not be something that the IRS will make the judgment call on, as they are not criminal attorneys. They have a division that investigates tax fraud, but at this point the husband has not committed tax fraud, at least not just because of the fact that he sent in a $400,000 tax payment in his name.

I understand that this must be an extremely frustrating situation, but it is not something that the IRS will get involved in. The fact that the husband fled the country with all of the marital assets is not a tax related issue.

If you would like, I can transfer your question to our legal forum and you can see what an attorney has to say about your options here.

Customer: replied 5 years ago.

The wife doesn't know what to do with the 50/50 order. talking to the irs is like talking to a rock. the husband is in hiding. It just seems like the IRS shouldn't allow clearly unusual overpayments.Don't overpayments accumulate interests? I'm sure that if the IRS criminal dept. looked at the facts in this situation they wouldn't allow it. I'm sure they wouldn't be ok with someone owing that much money! They shouldn't be ok with people using them to store money during divorce matters! This is not only frustrating, it is unbelieveable. One hell of a loophole.

Thankyou for your help. If you feel it would be helpful to speak to the legal forum, I would appreciate it.

Expert:  JasonM23 replied 5 years ago.
Well I have no further suggestions for you, so I will ask that your question be transferred to someone in legal.

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