Legal Question in Tax Law in Ohio

Re: Liability for spouses unpaid tax prior to marriage

This is a question we often face, both for taxes arising prior to the marriage, and for taxes arising during the marriage but for which only one spouse is liable (i.e. because separate returns are filed, or because the liability is from a business in which only one spouse is involved). To understand the IRS's position, divide the issue into two questions: First, can the IRS take your money to satisfy your husband�s tax debt? Answer: No. But second, if your husband wants to enter into a payment agreement or an offer in compromise, the IRS will evaluate his ability to pay by looking at his income and living expenses, expecting him to pay the most he can afford to pay. And under these circumstances, your income, contributing to the family�s ability to pay its bills, is a factor. Thus, before the IRS will agree to abandon its collection powers against your husband and instead permit him to pay the taxes through an installment agreement or to compromise them for less than what is owed, they will demand financial information from him on a household basis, which is where the information on your income and your living expenses comes in. I know it doesn�t make sense from the perspective of the nonliable spouse, but that�s the way it works.

More on this can be found in the series I write for the Maryland Society of Accountants on �Dealing with the IRS Collection Division,� which can be found on my firm�s website at www.bjhaynes.com. I hope this is helpful to you.