Is tax debt considered marital debt?

Tax Debt is Treated Like any Other Debt in a Divorce In most cases, joint tax debt owed by divorcing couples is considered like any other type of marital debt and will be included in the same category as outstanding credit card bills, mortgage balances, and other debts.

What happens to tax debt in a divorce?

If you filed tax returns jointly when married, both spouses are liable to the IRS. This is true after divorce, even if the spouse that is obligated per the divorce decree, fails to pay. When you file joint tax returns when married, both taxpayers are jointly and severally liable for the tax, penalties and interest.

Is a spouse responsible for debt?

Generally, one is only liable for their spouse’s debts if the obligation is in both names. But, unless both the husband and the wife are on the credit card account (even if only as a co-signer), one spouse will not be held liable for the obligation of the other on that account.

Are you responsible for your spouse debt after separation?

The general rule in California is that a spouse ceases to be responsible for any debts incurred by the other spouse once they have separated.

Does California have innocent spouse relief?

California does not have an injured spouse law. A tax refund issued to both spouses who file a joint return is community property. Because the refund is community property, it can be used to pay the debts of either spouse – whether owed before or during the marriage.

What is innocent spouse rule?

The Internal Revenue Service (IRS) usually holds that both signers of a joint tax return are individually liable for the entire tax due, plus penalties and interest. Under the innocent spouse rule, a spouse may claim not to be jointly liable if he or she did not know about errors or erroneous items on a joint return.

Can I sue my ex wife for back taxes?

The IRS can collect from either one of you, or both of you, in any amount that is convenient for them. If the IRS does hold you responsible for the debt you can file for innocent spouse relief or equitable relief. Or you can sue to collect from your ex, if that was your agreement.

Is spouse responsible for debt in California?

Since California is a community property state, the law applies that the community estate shared between both individuals is liable for a debt incurred by either spouse during the marriage. All community property shared equally between husband and wife can be held liable for repaying the debts of one spouse.

Is a spouse responsible for credit card debt in California?

If your spouse in California takes out a credit card and runs up a balance, you are not liable to the card issuer for the debt. The community property is liable for the debt, but you are not liable. During the marriage, property that a married couple acquires is presumed to be community property.

Are you responsible for your spouse’s debt in California?

Each spouse is personally liable for the debts that spouse incurs. That personal liability is independent of the marriage: it follows the person. The community, as long as it has property, is liable for the debts of both spouses, incurred before and during marriage.

How soon must a spouse apply for separation of liability under IRC 6015?

Under Section 6015(c), taxpayers who have separated from their spouse can file a separate liability election. This election must be made within two years after the date the IRS begins collection activities on the taxpayer making the election.