Why
Non-Liable Spouses Have to Provide Financial Information
when dealing
with the Collection Division
This
report is to explain why your spouse's information is required to negotiate a
reasonable agreement with the IRS on resolving your delinquent taxes, even
though he/she is not jointly liable for the taxes owing.
The
IRS must determine the reasonable collection potential of your tax debt.
When one spouse is not jointly liable for the taxes, that spouse’s
income and assets are protected from IRS collection actions, such as levy or
seizure. The IRS cannot touch
them (in States that do not have community property law). If the non-liable
spouse holds a joint interest in property with the spouse who does owe, the
non-liable spouse’s share is exempt from IRS collections.
When
one spouse owes taxes the IRS must determine reasonable payment potential.
The IRS has to look at total household income and expenses and allocate
any available funds to the spouse who owes in a manner to protect the
non-liable spouse’s disposable income.
Specifically account for each spouse’s income and
expenses paid by each spouse. With
this we have to be sure that the household expenses are being fairly split
according to income and ability.
This requires precise accounting and proof of who’s paying for what.
In
any event, when the non-liable spouse provides financial information, it does
not jeopardize the non-liable spouse’s income or assets.
The IRS cannot touch them (in States that do not have community
property law).
If you live in a state with community property laws
then your spouse may be jointly and severally liable for your taxes. You
should consult with a family law attorney in your state.
Community property states:
AZ, CA, ID, LA, NV, NM, TX, WA, WI
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