How to Keep Your New Wife Off Your “Offer in Compramise”
Let me start by giving you some general comments. Assume you have undergone an income tax audit prior to marriage and you wind up owing IRS tax. If the liability is joint and both parties wish to make the offer in compromise, both names must be shown. If the taxpayer is singly liable for a liability (e.g., employment taxes) and only one person is submitting the offer, only one offer must be submitted. However, in order to properly evaluate the offer, the non-liable spouse will be asked to submit a Form 433a disclosing all assets, liabilities, income and expenses attributed to the non-liable spouse. Or, the form 433a can be submitted listing all assets, liabilities, income and expenses of both spouses with the non-liable spouse’s assets, liabilities, income and expenses clearly marked.
Key Comments: The IRS can’t compel the non-liable spouse to provide financial information, however an offer is subject to the IRS determining if it would be in the government’s best interest. They will not approve an offer if the IRS believes the non-liable spouse can contribute to the liable spouse’s liability. Your attorney must make it clear to the IRS that the non-liable spouse’s assets will not be a part of the offer computation; however to get the IRS to consider the offer you will be compelled to provide financial information on the non-liable spouse.
You would be well-advised to submit your OIC to the IRS before getting married. Most likely a new bride will not take well to inheriting a tax liability of her new groom, especially given that her income could be included into the equation.
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