Am I responsible for taxes my husband accrued from a business gone bankrupt?

Question

My husband and I are separated and I am filing for divorce this month. I am wondering if I am going to be sought after for taxes that he owes in excess of 60k from his business that had to go into bankrupcy. We did file jointly for 2006. Can the IRS come after me if for instance, we are divorced and I try to buy a house on my own?

Answer 1

Was the business set up as a sole proprietorship, an LLC, a corporation, or something else? If it was a sole proprietorship, then the assets and debts of the business are part of personal assets and debts. You should see a lawyer to determine whether you are at risk and, if so, whether there is a way to reduce that risk.

If the business was an LLC or a corporation, then the assets and debts of the business are separate from personal assets and debts. You may not be personally liable. Again, check with a lawyer to be certain.

Answer 2

"We did file jointly"

Did you bother to read the instructions? By filing jointly you became liable for the tax bill. (If he owed any payroll taxes, that's a different issue.)

If he files for bankruptcy and you don't, the IRS can seek all of the back taxes from you.

You may or may not be eligible for "Innocent Spouse" but that is the avenue for getting you off the tax liability.

FWIW, the innocent spouse form is now just form 8857, the questionnaire was rolled into it.

Answer 3

You are responsible for any taxes owed for any year when you filed a joint return. It doesn't matter whether you are divorced by the time the IRS comes after you for it.

Answer 4

You had better file as Married, Filing Seperately to put a wall between your finances and your husband's. Go to IRS.GOV and look into the forms section; there are also forms you can fill out as an "Innocent Spouse" if the need arises; they are form 8857 and form 12507.