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Jesse Handel
Jesse Handel, Tax Preparer
Category: Tax
Satisfied Customers: 309
Experience:  10 years tax preparation. IRS Registered Tax Preparer.
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My husband and I have begun divorce proceedings. I was unemployed

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My husband and I have begun divorce proceedings. I was unemployed during our marriage and my husband did not file or pay taxes for a total of eight years during our marriage. Am I liable for that debt? Do I have any recourse? Can I avoid this debt? Can I claim waste when I file an amended answer to his complaint for divorce? Thank you.
Hello and thank you for coming to our website. We appreciate the opportunity to help you with your questions. I am very sorry that you are in such a difficult situation. A divorce is terrible enough without tax problems added to it.

Unfortunately, even after you get a divorce, you will be considered jointly responsible with your husband for any taxes that weren't paid and any interest and penalties resulting from those by the IRS and the state of Arizona (and any other states that you may have lived in during the eight years your husband didn't file) unless you can prove that you didn't know that he wasn't filing tax returns and didn't have any reason to suspect that he wasn't. That's going to be extremely hard for you to prove since you should have been signing any tax returns that he filed. The IRS is very suspicious about spouses trying to prove a lac of knowledge about joint financial matters and tax issues and they are very difficult to convince.

The upside may be that you may not have owed taxes on all of those years. The IRS doesn't really care if a taxpayer files for a refund. They don't want to give out money unless they have to. So, they will only charge penalties for not filing on years that you and your husband owed taxes, and they will also charge interest and penalties on the amount of taxes you owed. You can file a tax return at any time; however, you can only receive any refund that you may be owed for the last three years. After three years, the IRS quits giving out refunds owed; however, they can still go back and collect unpaid taxes for those years. However, it will be best for you to file tax returns for all eight years and, once the tax returns are prepared, which will be necessary to clean up this issue, it doesn't cost you anything more than postage to file the returns.

The best thing for you to do is to go to one of the professional tax preparation firms and have the tax returns that weren't filed prepared and filed. The IRS keeps the records of W-2s and other tax-related documents that are sent to them by employers and you can request copies of those documents so that you have the information to file the eight years of refunds. That information will also allow you to have your Arizona state tax returns prepared and filed. Once those returns are prepared, you will know what your situation is and you will be able to file those returns and start working out a payment schedule (if you do have unpaid taxes with interest and penalties) with the IRS and the state of Arizona (and any other states you may have lived in while you were married).

There are two filing statuses for a married person. You can file "married filing joint" and "married filing separate". Arizona is a community property state, which means that all income earned by you or your husband is pooled and then split in half and assigned to each of you. Most of the time in a community property state, "married filing joint" results in less taxes being owed. However, if during the eight years your husband didn't file, you lived in a non-community property state, you will want to file "married filing separate" because then your tax liability is based strictly on your income and if you were unemployed, you won't owe any taxes and you won't be responsible for your husband's taxes because he would also have to file "married filing separate" and pay the taxes on his return. Unfortunately, that won't work in Arizona. However, you should have the tax professional you work with calculate your return using both filing statuses to see which one results in the lowest taxes for you. If you file 'married filing joint", then you will have to get your husband to sign the tax return with you. Hopefully, the amount of money saved by filing jointly rather than separately will convince him to sign for his own good.

It's going to cost hundreds of dollars for a tax firm to prepare and file the eight years of taxes. I think that it is well worth the money, however, because collecting the information from the IRS, collecting the eight years of tax laws, and preparing the returns will be a nightmare for any person that isn't a professional tax preparer. Also, if a tax preparation firm prepares the returns for you, then they should be willing to help you deal with IRS at minimal or no additional cost.

There are three national tax firms and I can't ethically recommend a specific firm. However, H&R Block, Jackson Hewitt, and Liberty tax services all operate in a fairly similar manner. They have an office open for a few days a week during the summer and they all have people that can work directly with the IRS for you. To contact them, just call a local office and you will either reach a voicemail message or a person that can tell you which of your local offices are open in the summer and what their office days and hours are.

I would recommend that you have the returns prepared and filed as soon as possible, because it might be possible to arrange for payment of any unpaid taxes, interest, and penalties to be included as your husband's responsibility in your divorce decree.

My specialty is tax preparation and so I'm not qualified to answer your last question about your answer to his complaint to divorce. I would recommend that you lump any questions about your divorce into a separate question and send it to our Legal experts. You can also ask them if you can make your husband take responsibility for unpaid taxes and liabilities as part of the divorce decree. Our policy at Just Answer is to provide complete and satisfactory answers to client questions. If you need any more information about your tax situation or if I can offer you any more help with it, I will be happy to continue working with you about your taxes. Also, if you submit a question about your divorce to our Legal experts, they will be happy to fully explain any questions you have about your amended answer to your divorce decree, your chances of being able to make your husband pay for your tax problems as part of the divorce decree, and any other questions you may have about your divorce or your legal situation. They will answer your questions fully and continue working with you until you are satisfied that they have answered all of your questions relative to the legal aspects of your divorce.

I am sorry that I can't just tell you that everything is magically going to be all right. I really wish that I could. However, if there's any way that I can help you through the tax part of your situation, I will do my best. I really hope that things work out for the best and you will find that you didn't owe taxes during the years your husband didn't file, or if we can't have the best answer, at least I hope that you won't owe much taxes and that you can get your husband to pay them. Good luck and I really hope that things get better for you.
Jesse Handel and 2 other Tax Specialists are ready to help you
Customer: replied 4 years ago.

Thank you immensely for your assistance. I found your answers illuminating and quite timely. It was $37 well-spent. Have a good evening!

Thank you very much for a positive rating. I am very happy you were satisfied with my answer. I realize that I was unclear on one point. Once you figure out if you owe money to the IRS and how much, then you may be able to cut a deal with them. You could be help responsible for both you and your husband's past due taxes; but together you may be able to get the IRS to agree to accept less than the total amount, or they may agree to let you personally file "married filing separate" and pay taxes on your half of the combined income. The same may be true for the state of Arizona. This may be worth trying, if you can't force your husband to pick up the entire bill for any overdue taxes through the divorce court.

Again, thank you and good luck. Let me know if you need any more information. Please don't rate this part of the answer. I don't want to take a chance that you will be charged again and I don't know the system from the client side.
Hello again.

I just wanted to check on your situation. I hope that things have worked well for you so far. If there are any other tax questions that I can help you with, I would love a chance to work with you again. Thank you for letting me help you during a difficult time and I hope that I was able to make things a little less stressful for you.

Jesse Handel