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IRS sent a notice to levy property

Roseville, CA |

My husband and I got married in 2011, and filed 2011 tax return jointly. He did not have any income in 2011, all income was earned by me. In 2008 he took a first-time home buyer credit and ended up not buying a house. I didn't know about it, and only found out when IRS sent a notice in his name stating that he has to pay $8,500 immediately because this is IRS collection for the first-tome home buyer credit. The notice came in his name and states that if he doesn't pay, IRS can levy his assets. I owe a house that I bought before we got married with my money. Currently the only property we have together is a joint checking account where I receive my paycheck. I also bought a car in my name and using money from my savings account after we got married. What should I do to protect my property?

Should I take my husband off of the joint account now? Can IRS somehow find out that I bought a car after the wedding and can they possess it if it was purchased in my name and with my money? Also, we had a prenuptial agreement where all property purchased in marriage stays separate. What are the next steps for me to protect my property? Thank you.

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Attorney answers 4


While I am a tax lawyer, I do planning only so I am not an expert on IRS collection procedure. But I do know you should act now. You should not try to take your husband off the account, but you should open a new single account in your name only and get your payroll automatic deposit moved over to that account ASAP. You can use the joint account for family expenses as long as it lasts, but you should use the new separate account for your personal expenses such as your car payments and payments on the house which sounds like it should be your separate property. This may not be exactly the right course, but you will be better off than you are now if you do these things and you will not be committing fraud. I hope one of our AVVO tax experts may be able to give you a better reading on your rights about the car and the house and whether your prenup helps.

DISCLAIMER—This answer is for informational purposes only under the AVVO system, its terms and conditions. It is not intended as specific legal advice regarding your question. The answer could be different if all the facts were known. This answer does not establish an attorney client relationship. I am admitted only in California. (Bryant) Keith Martin


Mr Martin offers sound advice. However, you still should sit down with a tax attorney in your area to get conclusive advice. From what it looks like, you are not liable for his debts. You should not file a joint return until this matter is resolved even though this will result in higher taxes. Have your paycheck deposited into an account that is yours solely. But in any event see a tax attorney for first hand advice.

Hope this helps.

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Eventually the IRS will attempt to seize any assets that it believes belong to the taxpayer until the debt is satisfied. It would be a good idea to defuse this situation as quickly as possible by calling the number listed on the notice to levy. This will be easier if a revenue officer has been assigned to the taxpayer's case. Also, it helps to have a tax attorney involved in the communication with the IRS.

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In your case you don't owe that money to the IRS and the IRS cannot seize any assets that you own by yourself and not jointly with him. That means that, based on the facts you described, the only thing the IRS can seize - and they will sooner or later - is the joint bank account. Your car is safe; in fact, since it is titled only in your name according to your description, the IRS won't even think about seizing it because they'll check the DMV records first, find only your name on it, and will not give even a moment's further consideration.

Further, unless the notice you're talking about is a "final notice of intent to levy" then seizure of the joint bank account is not imminent. The simplest solution to protecting the money in the joint account that belongs to you is to withdraw that money, deposit that money in a new account with only your name on it, and then change your direct deposit for your paychecks to that new account. The IRS is extremely unlikely to object to that unless the joint account contains tens of thousands of dollars and the IRS can make a case that most of the money really belonged to your husband.

The bottom line is that your husband - and only your husband - is personally liable for that tax debt and he is the only person the IRS will attempt to collect from; your only exposure is on any assets you own jointly with him (large assets, like a house, or a car, or artwork, but only if his name is on the deed or title to the asset; the IRS is generally not interested in used TVs or livingroom furniture, even if those items cost you several thousand dollars).

Other than that, it would be in your best interest to make sure he pays that tax sooner rather than later because interest will continue to accrue, compounded daily, until it is paid. Also, once the IRS files a notice of federal tax lien against your husband, that will severely damage his credit rating which will have the effect of making it very difficult for the two of you to purchase anything together, such as a house.

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