When you get married, not only are you joining families but joining obligations and their financial background. This might raise a lot of questions that spouses might have regarding taxes. According to Google, one of the most asked questions is if my husband or wife owes taxes, can they come after me?
This is a very reasonable question that has a maybe answer. The answer will largely depend on your relationship status and the time your spouse incurred these tax debt. It will also depend on whether you filed your taxes jointly or separately.
In this article, we will answer the burning question of who owes back taxes if your husband or wife owes the IRS.
Can I Be Held Liable for My Spouse’s Tax Debt?
The IRS can find you liable for your spouse’s tax debts depending on several factors. You may be liable for your spouse’s tax debts depending on your marital status, when you filed these taxes, and whether you filed the taxes jointly or separately.
If your husband or wife claims false deductions during tax time, or simply fails to pay the IRS, then you may be held responsible for your husband or wife’s tax debts. Let’s go over a few scenarios and how they will affect tax liability.
|Marital Status||Tax Liability||Your Options|
|If your spouse’s tax debts were incurred BEFORE you got married…||You are not liable for any of the tax liability. Your spouse will be liable for their own back taxes||You can apply for an Injured Spouse Status to retain part of your withheld refund|
|If your spouse’s tax debts were incurred DURING your marriage…||You are liable for these taxes if you filed jointly. You are not responsible for these taxes if the tax debt incurred was without your knowledge||You can apply for an Innocent Spouse Relief to get forgiven for any back taxes incurred|
|If your spouse’s tax debts were incurred AFTER your marriage…||You may be liable if you were separated but not legally divorced, especially if you file your taxes jointly.||You can apply for Separation of Liability relief to assume partial or no liability to the back taxes|
1. Married filing jointly
When you file your taxes jointly, you get to enjoy a variety of tax breaks. These include Earned Income Tax Credit, traditional IRA deductions, student loan interest deductions, etc. Although there are many benefits to filing jointly, they are some downsides especially when it comes to tax liability. This is especially true if your husband or wife owes taxes.
When you file your taxes jointly, you and your partner assume joint and several liability. This means that both of your tax obligations become one and the same. This means that if either of you fails to pay your taxes, you are both equally liable for each other.
If this is the case, then yes, the IRS can come after you for owed back taxes that your husband or wife might owe.
2. Back taxes incurred before marriage
The IRS cannot come after you if your spouse’s tax debts were incurred before your marriage. Any tax debts that are incurred before your marriage are their own responsibility. This however might not stop the IRS from trying.
There have been situations where the IRS would intercept your own tax refunds to pay back these owed taxes. If this happens to you, you can file for an injured spouse status to get part of your refund back. It is then important to figure out with your spouse when these taxes were incurred and owed.
3. If you weren’t legally separated at time of filing
There are cases where taxes can be filed jointly even though you aren’t literally together. If you are going through a divorce or spending some time apart from each other, you will still be legally married doing that time. If that’s the case, you might still file taxes jointly because that’s what you would have always done in the past.
In cases like these, you could potentially qualify for separation of liability relief. When you file this, you are declaring that you are no longer married and wish to assume partial or none of the liability. You will need to legally show that you are divorced, separated, or not have lived together for at least 12 months prior to your claim.
If you can prove these things, then you may qualify for this liability relief. Make sure to work with your attorney if you have one.
Can the IRS take my house if my Husband or Wife owes back taxes?
Yes, the IRS can seize your house or your assets if your husband or wife owes back taxes. This only depends on whether if your spose incurred the debt during a year you filed your taxes jointly.
Whether you’re the one who encouraged the tax debt or your partner did, the IRS has legal rights to seize assets to get their money back. This can include garnishing wages, repossessing your house, and even your assets. This would depend on how much debt is owed.
As much as the IRS has legal right to seize your physical assets, it rarely happens. Instead, they are most likely going to issue a tax lien or Levy. This means that the IRS will garnish your wages or use cash you have in a bank account to pay for your spouse’s back taxes.
Is a widow responsible for husband’s IRS debt?
Generally speaking, a widow is not responsible for her husband’s IRS debt. However, if you file joint tax returns and the debt was incurred during that time, then yes, the Widow will be responsible for the husband’s IRS debt.
It is then important to work with an attorney if the IRS comes after a widow for their husbands IRS debt. You will need to have records of weather the taxes were filed jointly or separately. If you always filed your taxes separately, then it would have been his own liability.
Whether you have a strong relationship or a failing one, it can really make for messy tax situations. One of the most important things, especially early on in your relationship, is to discuss your financial situations. The earlier you do this, the less of a headache it becomes in the future.
Talking and communicating about your finances, especially when it comes to your tax debts, is important. If you are in the middle of a separation or already separated, then knowing your options is important when it comes to tax debt.
If you wants to qualify for any of the options listed above, then you must be prepared to disclose anything and everything to the IRS. The IRS wants to make sure you are not evading any tax burdens. If you are 100% sure you qualify for the options listed above, then be prepared to show evidence of that.