Effect to ex-wife of ex-husband making an Offer in Compromise when liability was joint
- March 29, 2011
- David Greene
- Comments Off on Effect to ex-wife of ex-husband making an Offer in Compromise when liability was joint
If a husband is ordered to pay all delinquent taxes by Family Court Order as part of a divorce and then makes an Offer in Compromise with the IRS to settle the debt for a portion of the total, is the wife still liable for the remainder? If the returns were filed jointly, then the answer is “yes.”
First of all the IRS does not care what a state court divorce order says. Since, in this scenario, the couple filed jointly, they both are jointly and severally liable for the entire tax bill. Therefore, the IRS can pursue the ex-wife to collect the amount of taxes due remaining after the Offer.
What is the ex-wife’s remedy in this situation? She can file a Rule To Show Cause against the ex-husband in Family Court to have him held in contempt for failing to obey the Court’s Order. This can result in fines and/or jail time for the ex-husband. As an alternative, the ex-wife can file her own Offer in Compromise, if she meets the criteria for an Offer.