Can the IRS Take My Spouse’s Income for My Tax Debt?

It depends – in some cases, the IRS can take your spouse’s income for your tax debt, but they can’t in other situations. Ultimately, it boils down to which type of return you filed, how much your spouse earns, and what you’ve done to resolve the debt.

In all cases, it pays to be proactive. To get help protecting you and your spouse from your tax debt, contact us at Timothy S. Hart Law Firm today.

What if my spouse doesn’t know about my tax debt?

If you filed a joint tax return, you and your spouse are jointly liable for the tax due, even if one of you didn’t know about the other’s income. But depending on the specifics, your spouse may be eligible to apply for innocent spouse relief or take other actions to protect themselves.

Scenario	Relief options for your spouse	What to expect
You had tax debt from a previous marriage that your ex-spouse was ordered to pay.	Your new spouse is not liable for the debt.	Even if a divorce decree says your ex must pay the tax, the IRS can still go after your assets, including assets owned jointly with your new spouse.
You had tax debt from before your marriage that you didn’t tell your spouse about	Your spouse is not liable for the tax debt.	The IRS may be able to [a] [b]seize some jointly owned property, but not your spouse’s wages.
You didn’t report all of your income – the IRS discovered the income and adjusted your return.	Innocent spouse relief – your spouse can apply for relief to the IRS, but typically, you must be divorced or separated.	If they qualify, your spouse will only need to pay their portion of the tax liability. If not, the IRS can seize either of your assets.
You didn’t pay the tax bill, but told your spouse you were going to	Equitable relief – your spouse must apply	If they qualify, your spouse can get relief from any tax they thought had been paid. If not, the IRS can seize either of your assets.
You filed a joint tax return and signed it on your spouse’s behalf.	Legal action – your spouse may have the right to bring criminal charges against you.	It is illegal to forge someone else’s signature, even if you’re married.

These are not the only possible scenarios, and this does not constitute legal advice. To get customized solutions for your unique situation, contact us today for guidance.

How filing status and state laws affect tax liability

If you file a joint return, both you and your spouse are liable for the tax due. But if you file separately, you’re only responsible for the tax due on your own return, unless you live in a community property state – then, each of you is generally liable for half of the tax due shown on the other spouse’s return.

Filing status	Tax liability	IRS collection powers [c] [d]
Married filing jointly	You’re both liable for the tax debt.	The IRS can seize either of your income or assets.
Married filing separately	You’re each liable for the tax due on your own returns.	The IRS can only seize the income or assets of the person who filed the return.
Married filing separately in a community property state	You’re each liable for half the tax due shown on each return.	The IRS can seize either of your income or assets.

Who’s liable for business taxes?

That depends on the structure of the business and the type of tax – if you’re a sole prop, a partnership, or an S-corp, the profits from the business get reported on your individual tax return. If you file jointly with your spouse or live in a community property state, both you and your spouse will be responsible for the taxes related to this business income. However, if you file separately, only you will be responsible for the tax.

If you’re dealing with taxes you pay directly from the business, such as sales tax, payroll taxes, or excise taxes, only the business owner is responsible. That’s typically just one of you – unless you run a partnership with your spouse or if the business is just an alter ego ^[e] for both of you. However, if the state or the IRS assesses any of these taxes or related penalties against you personally, then the state or the IRS can be able to go after your jointly owned assets, but not your spouse’s individual income or assets.

What can the IRS take from my spouse?

If your spouse is liable for the unpaid taxes, the IRS or the state has the right to seize the following:

• Bank or investment accounts in your spouse’s name.
• Assets owned by your spouse or by you and your spouse jointly.
• Your spouse’s income – except for a small exempt amount.

Note that the IRS only leaves you a small exempt amount of income if they start a wage garnishment. If they garnish both of your wages and one of your wages covers the exempt amount, they may be able to take all of the other spouse’s wages.

If your spouse is not liable for the debt, the IRS cannot seize their individual assets, but they may be able to seize jointly owned assets.

What should I do if my spouse doesn’t know about my tax debt?

If the debt is related to a jointly filed return, your spouse will find out. It’s up to you if they found out through a Final Levy Notice in the mail, a frozen bank account, or because you come clean with them.

Delaying telling your spouse can blind side them and make the situation worse. Also, most types of innocent spouse relief require the marriage to be over – either through divorce, legal separation, or death. Equitable relief can be an option in situations where you’re still married and it would be unfair to hold your spouse responsible, but that’s rare.

Ultimately, it’s up to you how you tell your spouse. But know, you’re not the first person to hide financial issues with your spouse, and there are options to help both of you.

Resolution options for tax debt

Want to protect you and your spouse from unexpected seizure actions or wage garnishment? Then, make arrangements with the IRS to pay the tax debt before it escalates to that level. Here are the main options:

• Installment agreement – make monthly payments for up to 10 years.
• Offer in compromise – settle for less than owed, if you prove that you can’t pay in full.
• Currently not collectible – if you can’t pay anything, prove that to the IRS and get them to stop all collections on your account.
• Innocent spouse relief – as explained above, this option may allow your spouse to get relief, but you’ll still have to pay your portion of the tax bill.
• Penalty abatement – combine with other programs and use to reduce your total amount due.

The earlier you reach out, the better. A tax attorney can help you find the best option for your situation, or you can contact the IRS directly.

When to get help

Hiding a secret is usually pretty uncomfortable, and the more time that passes, the harder it can be to come forward. But here are some signs you should act now.

• You owe more than $10,000 that your spouse doesn’t know about – this is the level of debt where the IRS generally starts to issue tax liens and explore involuntary collections.
• You’ve received a Final Notice of Intent to Levy – this means you have just 30 days before the IRS moves forward with wage garnishments or asset levies.
• You’ve lost a tax refund due to back taxes – if your spouse wasn’t liable for the back taxes, they can get their portion of the refund back by making an injured spouse claim, but only if they act within a certain time frame.
• You’re overwhelmed and scared – dealing with tax issues is always harder and even more challenging when your spouse doesn’t know.

Get help with tax debt today.

Regardless of where you are in this process, we can help you. Don’t deal with the IRS or your state on your own. Instead, reach out to a qualified tax attorney for help. Contact us at the Timothy S. Hart Law Group today, and we’ll help you find the best resolution possible for your tax problems. We are affordable tax attorneys in Albany NY and NYC.

FAQs – about tax debt and your spouse

Here are some additional questions you might have if you owe a tax debt that your spouse doesn’t know about. Again, remember liability varies based on what type of return you filed, whether or not you were married when you incurred the tax debt, and the rules in your state.

Can the IRS take my spouse’s paycheck for my tax debt?

Yes, but only if your spouse is legally liable for the debt. They cannot take your spouse’s paycheck for tax debt that’s only in your name.

Will my spouse find out I owe the IRS?

If the tax debt is related to a jointly filed tax return or if you live in a community property state, then the IRS will send notices to both of you. There is no right to privacy from your spouse on income or taxes related to a jointly filed return. If you file separately, the IRS will not send notices to your spouse – but the laws in most states allow debt collectors to tell people about their spouse’s debts.

Can I fix this without them getting involved?

Ultimately, that depends on the type of tax debt, who’s liable, and the solution you’re applying for. For example, if you want to apply for an offer in compromise related to a tax debt on a jointly filed return, both you and your spouse must sign the application.

What if I file separately—am I still protected?

If you file separately, you’re only liable for your portion of the tax debt, unless you live in a community property state. However, you lose out on several credits when you file separately.

Source:

https://www.irs.gov/individuals/innocent-spouse-relief

https://www.irs.gov/individuals/separation-of-liability-relief

https://www.irs.gov/individuals/equitable-relief