The son of a friend of ours married a woman from Russia (no, not mail order.) It was a disaster (for reasons I won’t got into here in GQ) and he basically abandoned her. He is now in Eastern Europe, and the divorce became final a few days ago - he just ignored the whole thing.
That very day she got a letter from the IRS saying they owed about $5,000 in taxes for the 2007 tax year. She got her Social Security number in late December that year, but they filed a joint return (he insisted.)
My assumption is that they are both equally obligated - but if the divorce has any impact, please let me know. Would it have been possible to put the obligation into the settlement, assuming she had known about this?
My major question though is how does this get handled in practice? She has plenty of evidence that the income was his. Can this get assigned to him?
She is going to go in and talk to the IRS, but I’m curious about what she can expect.
We listed ours as married filing separately per the lawyers directions. It takes care of most of that problem because each person only lists their own W-2, investment income etc. that is in their own name only.
If they filed jointly, the IRS takes the position that they are jointly and severally liable (in other words, they both owe the debt but the IRS can attempt to collect the full amount from either of them individually). If you only want to liable for your own tax, you must file MFS (Married Filing Separately)
Divorce settlements often specify that one party is responsible for the debt, or sets a percentage to split the percentage, but that’s not relevant to the IRS. A settlement that says each partner owes 50% of the tax debt only means that you can sue your ex for their half after the IRS seizes your assets.
Before I could give any advice about what to do, I would want to see the letter the IRS sent. Letters like that can be due to failure to pay a debt they knew about, assessment for tax on unreported income, or an estimated assessment based on failure to file. Each scenario has different options for handling the problem. Talking to the IRS taxpayer advocates is an excellent first step if she meets the requirements for their help.
There is a thing called the Innocent Spouse exemption. Any competent GP who is remotely familiar with income taxes should know about it. Your mail order bride should get herself to a lawyer.
She will. She just got divorced, so she’s not allergic to them, and her ex mother-in-law (who is on her side in this) works with lots of judges, and can get good recommendations.
Thanks, that sounds promising.
She got pressured to file jointly, for what now seem like obvious reasons.
BTW, she is an MD in Eastern Europe. Her immigration status is in good shape - there is plenty of evidence (which is real) that the marriage was not for the purpose of getting her into the country. INS actually seems to be pretty good about people moving here legitimately and then getting dumped.
She doesn’t need a lawyer, just a CPA or other tax professional.
bump
The person in question thanks you all. They weren’t aware of this, but since the issue was that he didn’t report some income, the Innocent Spouse exemption works perfectly. The requirement that she not know about the problem is no issue, since the income was earned before they got married, when she was still in Russia.
They are very relieved.