Legal Question in Tax Law in California
Does new spouse inherit husband's tax liabilities?
Husband fails to file tax return or pay taxes on large earnings several years prior to marriage. Wife has substantial assets acquired prior to marriage. Marriage is now 10 yearas old. Husband has not worked for several years and is totally dependant upon wife for support.
1. Does wife have any share of husband's tax liability from period prior to marriage?
2. Can IRS seize any of her assets to satisfy their tax claim against husband, including interest and penalties assessed since marriage?
3. Can wife file a joint tax return in order to take advantage of husband's exemption without incurring tax liability?
4. Will divorce limit or eliminate any liability she may have unknowingly incurred?
3 Answers from Attorneys
Re: Does new spouse inherit husband's tax liabilities?
I suppose from this inquiry that the IRS is taking the position that the taxpayers have to prove that the wife's assets are not subject to attachment. You are on the right track to seek professional advice. However, because the results of this kind of dispute turn mainly on the particular facts, you are unlikely to obtain useful advice here. Presumably, the wife in question has the resources to hire a competent CPA (don't hire some guy who calls himself an "accountant" without his CPA ticket), and may need a tax lawyer as well. My advice is that she do so immediately.
Best wishes,
LDWG
Re: Does new spouse inherit husband's tax liabilities?
There is a posibility that there could be some liability. I think you need a tax attorney, rather than a CPA.
Re: Does new spouse inherit husband's tax liabilities?
The taxes should be addressed by a professional, but to answer your questions:
As long as she has not commuted her separate property to community property, her separate peoperty is not subject to his pre-marriage tax liability. Any community property after marriage is subject to the claims of his creditors (even her half). If she files a joint return with him, then any refund is subject to being kept by the IRS in satisfaction of his pre-marriage tax liability. She should not put any assets from pre-marriage or any assets purchased with pre-marriage assets in joint ownership with him. Divorce can protect her pre-marriage assets, but not if an asset was ever recorded in joint ownership with him.
JOEL SELIK
www.taxworkout.com
800-894-2889
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