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Phillip B, EA
Phillip B, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 704
Experience:  Practicing since 2004. Expert in 1040, small business, represent vs. IRS, & int'l tax mattters.
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Im nearing completion of my divorce here in Arizona, my question

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I'm nearing completion of my divorce here in Arizona, my question is am I liable for any taxes that my soon to be ex-wife hasn't paid with her single member llc. The business operated for 18 months, she only reported Credit Card Income on her Schedule C for both 2010 & 2011 to her CPA, in addition she didn't report the Capital Gains once she sold the business in July 2011. I did email her CPA about the Capital Gains but don't know if it was reported.
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If you filed separate returns for 2010 and 2011 (as it sounds like you did) then you will have zero liability on her income taxes.

If you filed joint income tax returns for those years, then you the IRS and your state can hold you liable for her (and your's, if the return is joint) unpaid taxes.

If there are any sales or employment tax issues, the IRS or the state of AZ would likely only be able to hold you liable for those taxes if you were a responsible person in her business. The responsible person threshold is crossed if you could sign checks from her business account.

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Customer: replied 4 years ago.

Hi Phillip,

The main question is her LLC Business, I was a non member, am I still liable for her business taxes. I will be filing with IRS the Injured Spouse Form for 2010, this was a jount Tax filing.

You are only liable for income taxes related to her business on the returns that were filed jointly. You are liable for any of her income or self-employment taxes on the 2010 return. You will not be held liable for any of her income, capital gains, or self-employment taxes related to the 2011 return.

For any other business taxes (like state fees, sales taxes, or employment taxes) you will not be held liable because you were not an owner or responsible person in her business.

Let me know if I can do anything else.
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