Posted on: 11 December 2015Share
In divorce court, taxes are treated just like any other debt. Therefore, if you and/or your spouse owe back taxes, the court will assign responsibility for paying that money according to the laws of your state and other factors such as financial ability. However, the IRS will still hold both of you liable for the debt if it arose from a joint filing. So if your spouse doesn't pay as ordered, the agency will come after you for the entire balance regardless of what your divorce papers say. Here are a few things you can do if your ex refuses to fulfill his or her obligation to pay the tax burden assigned by the court.
Talk to Your Ex-Spouse
It's always best to try to talk things out with your ex-spouse before taking any legal action. If the person isn't paying the debt because of a misunderstanding or has suffered a financial setback, then you don't want to waste time, money, and goodwill on a lawsuit when you can probably resolve the situation in other ways.
Remind your spouse of his or her obligation to pay the debt. If the person is having trouble paying off the tax bill because of money problems, work with him or her on alternative ways to handle the situation. For instance, the person could set up a payment plan with the IRS or ask other family members for financial assistance. If you pay spousal support, you could offer to pay the bill in exchange for not having to pay the support for the amount time it would take to pay off the debt. However, be certain to speak to your attorney about this type of deal to ensure you won't run into other legal problems going this route.
Talk to the IRS
Although the debt may have been incurred as a result of a joint filing, the IRS provides a couple of ways one spouse can extricate his or herself from some or all the liability of paying the back taxes. One way is to file for Innocent Spouse Relief. This petition alleviates you from liability for any additional taxes levied against you and your ex-spouse if those taxes were the result of your ex taking deductions or credits he or she was not entitled to or misreporting income.
However, this option is only available for two years after the agency first starts attempting to collect the tax owed. You also cannot have known about or had reason to know that you ex-spouse had committed those errors on the tax return, and you must show that it would be unfair of the agency to hold you accountable for those taxes. If the IRS approves your petition, then you will be absolved of responsibility for the tax.
The other option is to file for Separation of Liability Relief. This petition essentially splits liability for the back taxes between you and your ex, so you would only be responsible for paying part of what's due. This is a particularly good option if your divorce decree already assigned responsibility for the taxes in this manner. Successful filing of this petition will prevent the IRS from coming after you for your ex-spouse's portion. To qualify for this option, you must be divorced, legally separated, or have not lived together for a minimum of 12 months prior to filing the petition.
Go Back to Court
The third option for handling a spouse who won't pay his or her share of the taxes is to take the person back to court. While you can ask for the court's help in enforcing the divorce decree, this option works best if the IRS has already taken money from you to pay the back taxes. You could take your ex-spouse to court and sue for the return of the money confiscated by the agency. Once you receive a judgment, you could then garnish your ex's wages or use other collection methods to get the money the person owes.
Another option is to request the court modify the distribution of property to give you assets equal to the amount of money you paid on your ex-spouse's behalf.
Dealing with a spouse who refuses or is unable to meet his or her financial obligations can be frustrating legally and personally. It's a good idea to speak to a divorce attorney for information about or assistance with handling this type of situation.