The last year we were legally married we file our returns separately. This is the year where I believe she may get in trouble for not reporting income she received. Can I still be held liable?
In regard to return filing, you will not be liable for your spouse's tax liability if you filed separately.
The IRS can assert alter-ego/nominee liens against you if the determine that there was a fraudulent conveyance (i.e., there was a transfer of assets between spouses in order avoid tax collection). An alter-ego/nominee lien would make you liable.
This material does not constitute tax, legal or accounting advice. It was not intended or written for use and cannot be used by any taxpayer for the purpose of avoiding any IRS or NYS penalty. The information contained herein is for informational purposes only as a service to the public, and is not legal advice or a substitute for legal counsel, nor does it constitute advertising or a solicitation. This response is not intended to create, and does not create, an attorney-client relationship between you and the author.
Did you do anything (any overt act) to accommodate her activities in this regard? Did you get any benefit from this money? Have you thought and considered in advance what you will do/say if contacted by an investigator?
Don't answer these questions on this forum.
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.
Since you and your ex filed your Federal income tax returns separately, you cannot be held personally liable for the tax liabilities that she has incurred. However, if you hold assets jointly or your ex has transferred assets to you after her tax liability accrued (for fraudulent transfer purposes, that occurs at the close of the calendar year in question), your assets have potential exposure to collection of her liability. Depending on the stakes involved (i.e., the magnitude of your ex's unreported income, the amount of your assets, and whether you hold your assets jointly or separately from your ex), you may wish to retain a tax planning attorney experienced in handling such matters.
My fellow counselors also have provided excellent advice to you.
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.