Joint Tax Liability After Divorce

Consider the following situation. Husband and wife owe delinquent taxes. Sometime later they divorce and the judge orders husband to be responsible for all delinquent taxes. What happens to the wife’s liability if the husband successfully pursues an Offer in Compromise? First of all the IRS does not care what a state court divorce order says. Since the husband and wife 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 still due after the husband’s Offer is paid. If they do, the ex-wife can then file a Rule To Show Cause against the 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. In a later blog I will continue this answer with another possible solution to the husband’s problem.