I hear about this in relation to community property states. In those states, they can do exactly what you are saying because income is considered jointly earned, and debts are considered jointly incurred if both spouses benefit from the non-payment.
it sounds like a state tax issue, so I am not sure if there is going to be innocent spouse relief for this unless the state provides such a remedy. But my guess is that they think she is jointly liable. So having somebody stop the levy will not address this. I can promise the process for proving that will be more involved than stopping the levy, if it is even possible.
You are in a "pickle" but it can be solved. In the end, you won't be paying money if the obligation arose as you have stated, however, you will not be able to stop their harrassment in the short term. If you want to discuss this further, I can have an attorney in our firm speak with you if you want to move forward. Corey Rabin, Esq. 914-948-2222 x101
Generally, you both are liable because the tax form from the Corporation was your joint 1040. The previous poster is correct as it relates to an "innocent spouse." This is a bit of a process, that you will probably want to consult a lawyer for.
"You may qualify for innocent spouse relief for a tax year beginning on or
after January 1, 1999, only if all of the following apply:
• you filed a joint return for the tax year(s) for which you are requesting
• there is an understatement of tax on the return(s) that is due to
erroneous items of your spouse (or former spouse); and
• you can show that when you signed the return(s) you did not know and
had no reason to know that the understatement of tax existed (or the
extent to which the understatement existed); and
• taking into account all the facts and circumstance, it would be unfair
to hold you liable for the understatement of tax. "