Does The IRS Have To Obey a State Court Order?

Many times, in a divorce or legal separation action, a Family Court will order one spouse (e.g. husband) to be liable for all delinquent taxes owed by the couple for jointly filed tax returns.  Then, the wife is surprised when the IRS begins collection activity against her. She tells them she doesn’t have to pay because the Court ordered husband to pay and is shocked when they ignore her protests.

 

 

The truth is, since the couple filed jointly, both are jointly and severally liable for the entire tax bill.  The IRS, being a federal agency, does not have to adhere to the state court order and can and will pursue both parties for the taxes.

 

If husband files an Offer In Compromise and is successful, he can pay the Offer amount and be completely relieved of any further liability for the tax debt.   The IRS can then pursue the ex-wife to collect the amount of taxes remaining after the husband’s Offer is paid.   Of course, the wife can also pursue an Offer In Compromise if she qualifies for one.

 

In this scenario, if husband pays his Offer and there is delinquent tax remaining that the wife eventually pays to the IRS, what is her remedy?  She can  file a Rule To Show Cause against him in Family Court to have him held in contempt for failing to obey the Court’s Order. This can result in forcing him to reimburse her as well as fines and/or jail time for him.