I have started living with a woman in May 2013. I have a large tax debt (judgment in 2009 on tax years 2003 and 2004) that we do not want transferred or assessed to this woman. We have been told that the community property rules in California state that my debt can be assessed to the woman that I am living with now. Is that true? And if that is true what is the time line for community property in California. We do not comingle funds. All housing costs are paid by her. I do not pay anything on her house or for the housing costs. She is greatly concerned that if we continue to live together that the tax debt can and will be assessed against her assets. Do I need to move out to avoid that?
No; it is not true. Debts accumulated prior to marriage are separate property. If her assets are erroneously liened or wages garnished, you should be able to straighten the matter out with a simple letter or telephone call to the Taxpayer Advocate, nka the Executive Liaison at the FTB. If that does not work, you may have to consult with a tax attorney or CPA to gain more leverage; but, generally, that is not required.
Thus, you do not have to move out of the house.
One more thing...you did not state that you're married to this woman. You stated only that you've started living with her. California is not a common-law marriage state. That is, living together will never result in a common-law marriage in California.
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It sounds to me like your not married. There is no common law marriage in CA so Community Property would never be an issue if you do not marry her. The only way that I can see they could possibly go after her is if you transfer assets to her to get them out of your own name in order to avoid collection.
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There is no risk that the woman you are living with and/or her property can be used to satisfy the judgment against you. The community property laws of California have no application to unmarried persons. In addition, California does not recognize "common law marriage" whereby a man and a woman (or two same-sex people) are deemed to be marred after cohabiting for a specified length of time (usually years) and holding themselves out to the public as spouses.
If you decide to get married down the road, you and your girlfriend would be well advised to enter into a separate property agreement, to file separate income tax returns, and to ensure that you keep all of your funds and assets separate. You would be well advised to consult a family law attorney experienced at drafting such documents.
The answer to this question does not establish an attorney-client relationship. Moreover, this attorney is licensed to practiced law ONLY in the State of California. Answers to questions from users in other jurisdictions or states are meant to provide only general information. Users should contact a local attorney in their jurisdiction or state to address their specific tax issue.
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Assuming no criminal/fraud entanglements, have you considered bankrutpcy to eliminate the debt?
Talk with a tax/bankruptcy practitioner in detail.
Certified Tax Specialist -- State Bar of California Board of Legal Specialization (J.D.; LL.M.-Tax)
Electrical(M.S.E.E.)-Chemical(M.S.Ch.E.)(B.S. Chemistry)-Mechanical Patent (Intellectual Property) Attorney & MBA (562) 594-9784 --- http://patentax.com
Curt Harrington Patent & Tax Law Attorney Certified Tax Specialist by the California Board of Legal Specialization PATENTAX.COM This communication is general information and not legal advice, and does not create an attorney-client relationship. This communication should not be relied upon as any type of legal advice. Please note that no attorney-client relationship exists between the sender and the recipient of this message in the absence of either (1) a signed fee contract and (2) remission of an agreed-upon retainer. Absent such an agreement and retainer, I am not engaged by you as an attorney, nor is any other member of my law firm.
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