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Back Taxes and Divorce

Zuckerman Law, LLC July 12, 2023

Tax Sheet Pen and A CalculatorGetting a divorce is a life-changing experience. Both spouses have too much on their plate when going through ending a marriage: splitting property, resolving custody-related issues, and also dividing debts. However, many couples tend to forget about their tax obligations, which can become a serious issue if the couple owes back taxes at the time of divorce.  

As a tax attorney at Zuckerman Law, LLC, I help divorcing couples understand who owes what, what to do with back taxes, and how to work with the Internal Revenue Service (IRS) during and after your divorce to avoid potential tax problems. I have offices in Boca Raton and Fort Lauderdale, Florida, and serve clients throughout South Florida.  

What Are Back Taxes? 

Back taxes are any taxes that have been unpaid—partially or fully—in the year they were due. Unpaid taxes can accumulate at the federal, state, or local levels. In addition, penalties and interest may accrue when a taxpayer owes back taxes.  

In most cases, joint tax debt is treated just like any other type of marital debt when couples seek a divorce. If spouses jointly filed tax returns during the marriage, both of them will be liable to the IRS. What it means is that the IRS can collect the debt from either spouse even during or after the divorce, no matter what your divorce decree says.  

Joint vs. Separate Tax Debt 

Tax debt can be joint or separate:  

  • Separate tax debt is any debt that occurred before the marriage or after the divorce is finalized (at the end of the tax year). 

  • Joint tax debt is any debt that occurred during the marriage and after the divorce until the end of the tax year.  

A taxpayer who got a divorce cannot use “Single” or “Head of Household” filing status until their divorce is finalized. When your divorce is pending, you can use the “Married Filing Separately” status to avoid potential liability for your soon-to-be-ex-spouse’s taxes.  

The Internal Revenue Service & Your Filing Status 

Contrary to popular belief, the IRS does not follow divorce decrees. Instead, the IRS cares about what date it is on the calendar and what your filing status is.  

According to the IRS’s website, a taxpayer’s filing status depends on whether the taxpayer is married or unmarried on the last day of the tax year (beginning Jan. 1 and ending Dec. 31): 

  • If you are separated (not legally separated) but not divorced at the end of the tax year, you are still considered “married” for tax filing purposes; and 

  • If you are legally separated or divorced at the end of the tax year, you are considered “unmarried” and file as single for the given tax year.  

If you are confused about filing statuses, contact Zuckerman Law, LLC. I can explain what your obligations are and what filing status to use when filing taxes after your separation, while your divorce proceedings are ongoing and after your divorce is final.  

What Are Your Options for Relief?  

There are several options for tax relief available to those who get a divorce:  

  1. Innocent spouse relief. If you seek this relief, you can avoid paying additional taxes if you (a) can prove that your spouse understated the taxes due on the joint tax return and (b) you were not aware of the errors. This type of relief is only available for taxes due on your spouse’s employment/self-employment income.  

  1. Separation of liability relief. With this relief option, you can avoid paying your spouse’s share of understated taxes in a joint tax return if you and your spouse are no longer living together or got divorced. However, with separation of liability relief, you are not eligible for a refund for any taxes already paid.  

  1. Equitable relief. If your spouse understated or underpaid taxes due on a joint tax return, you can seek equitable relief to ensure that you are not held responsible for those taxes.  

Once you receive a notice from the IRS about an audit or taxes due after errors were made on your tax return, you have two years to request innocent spouse relief or relief by separation of liability. The date you must request equitable relief depends on whether you want to request a refund, relief from taxes on community income, or relief from a balance due.  

Work With an Attorney Who Advocates for Your Best Interests 

If you owe back taxes and are going through a divorce (or are already divorced), you might want to work with a tax attorney. Each couple’s situation is unique, which is why seeking legal counsel may be necessary to avoid potential tax problems down the line. At Zuckerman Law, LLC, I can answer your questions and provide you with solutions tailored to your specific circumstances and needs. Contact my office today for a free consultation.