By John W. Schoen Senior Producer

Q: My wife and I were married in April this year and I was planning to file our 2004 federal taxes married-jointly come next April.  However my wife had her last (albeit small) refund zeroed out by the IRS when she filed married-separately in year 2000 (while married but separated from her former spouse).  Instead of the expected refund she got a form letter from the IRS saying that the $64 refund was being applied "to other federal taxes owed on a secondary social security number."  The letter listed the social security number of her ex-husband (now deceased) and said the refund was being applied to 1996 tax owed.  Her ex-husband had her sign their married-jointly tax returns up through 1999 and she was unaware that any shenanigans were taking place.  We don't know the extent of how much money was or is still owed.  They separated in 2000 and he passed away in March 2004.  The little estate he had left was handled by his friend/executor.

The letter gave no indication that the IRS is going to do anything aside from take her refunds.  In the 3 years since (2001-2003) she did not have a refund coming so the issue has not resurfaced but I would not be surprised if the IRS would continue to take any refunds. I have 2 questions:

1)  I am expecting a pretty good refund for 2004.  If my wife and I file married-jointly, can the IRS take that refund for her past "sins" given that I had nothing to do with it?  If that is possible then both of us will file married-separately.

2)  Could the IRS come after our joint assets (due to our marriage)?  She has no significant assets of her own.  If so, should we contact an attorney or what would you recommend? Curt S., Lakeville, Minn.

A: For starters, you should definitely contact a good tax accountant if you don't already have one. You need to find out more about those "other federal taxes owed on a secondary social security number."  Specifically, how big is that number? If it's relatively small, it's probably better (and cheaper) to pay it and put the matter to rest.

If the IRS believes your wife still owes a substantial tax for the jointly filed returns of a previous marriage, it really doesn't matter how you file future returns or title your assets. For people like you and me who follow the rules, it's not easy to hide from the IRS when it comes to back taxes. For example, they could put a lien on (the legal term is "garnishee") your wife's wages.

If she has sizable "back taxes" (according to the IRS) you may also be able to challenge that position on the grounds that she had nothing to do with failing to pay those taxes. For that, unfortunately, you'd almost certainly need to hire a tax lawyer. The IRS takes the position that spouses signing tax returns are legally bound to vouch for the truth of everything in that return and bear the burden of seeing that those taxes are paid.

© 2013 Reprints


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%