Wife is Liable for Husband's 401(k) Income not reported

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Question:
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Category: Tax and Taxation Law
Location: IA
Subject: Husband caused tax liability I was not aware of on tax returns

My husband filed federal and state tax returns that I signed, not knowing that he did not report income from the liquidation of his 401K plan and untaxed money from consulting work (neither of which did I know existed). The IRS and the State of Iowa has named me as equally liable because a joint return was filed. We are now separated but not yet divorced, because I do not have enough money to file for a divorce, and he said he is willing to be soley responsible for the delinquent taxes; however, he is now living out-of-state and is no longer employed. What can I do to avoid liability? He says he has contacted both the State of Iowa and the IRS to take sole responsibility, but I keep getting letters from both places. Help! I already do not have enough money from my own income to even pay for all of my living expenses. I tried to seek legal aide, but my income is too high to be elgible, yet not enough to survive on let alone paying back the IRS and the State of Iowa for something my estranged husband did without my knowledge.


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Reply:
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Category: Tax and Taxation Law
Location: IA
Subject: Re: Husband caused tax liability I was not aware of on tax returns

When you file a joint tax return you are "jointly and severally" liable for all taxes. That means you have to pay 100% of the liability even if incurred solely by your husband. Your only way out is to either make sure your "soon to be" ex-husband pays the taxes or to file as an "Innocent Spouse." You will have to prove that you did not know about or benefit from your husband's failure to report income. This will require the help of a tax attorney.

My web site has additional information on this and on filing an Offer In Compromise at:

http://www.taxesq.com/

I hope this helps!

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