Comments on: Innocent Spouse Married a Tax Cheat. Now What?

By: Neal Frankle

Neal Frankle — Wed, 01 Feb 2012 14:45:51 +0000

Other than the steps outlined above, I’d talk to a tax attorney and/or your tax advisor.

By: lee

lee — Tue, 31 Jan 2012 21:30:33 +0000

My husband was issued a W-2 for the first 3 months of 2011, but worked construction without paying taxes for the remainder of the year. Unable to persuade him to file taxes on himself, I sought relationship counseling. I have accepted the fact that I cannot control his actions. I pay all of our living costs through my bank account. I am the sole owner of our house and my business. We do not comingle assets and even though I struggle, I do not ask him for money to help support our family. I have removed his name from my accounts and will be filing separate. What other steps should I take to insulate my assets from his tax evasion? Should I ask him to use a separate accountant to file his W-2?

By: Betty

Betty — Wed, 24 Mar 2010 18:08:56 +0000

I married a tax cheat! What do I do?

My husband is self employed and has not paid taxes since 2001. I was not aware of this when we married. He appeared to be a very together, successful business owner. I think I found out about a year and a half into the marriage. We have almost been married 3 years, married ironically on April 15, 2007. Since the day I found out I have asked him to take care of it, do the right thing, etc. I have lost countless nights of sleep worrying about this.

He has had the taxes prepared for all those years. That is a good first step. HOWEVER he owes thousands and I do not see anyway for him to pay them off any time soon and I can’t even trust he will, base on his history. He wants me to file jointly for the years we have been married because it would save him about $20,000 (not included penalties and interest). That is how those returns were prepared.

I am going to REFUSE to file a joint return! I am also seriously considering a divorce or a legal separation ASAP. I do not want to leave him because I love him and value the companionship. I just want to distance myself financially and legally and hope that he does take care of this the way he is promising. In the mean time I just don’t think I can take any chances.

We are certainly not living a glamorous lifestyle as the couple above did. We do not own a home, take fancy vacations or own expensive cars. I have separated my finances from him and struggle a bit to make ends meet for my 3 children and myself with my $40,000 a year income.

I want to be able to protect myself and my children’s future. What do I do in this situation? Divorce? Legal separation? Separate finances? NOT filing a joint return? Anything else?

I really want to be smart about this and do the right thing!

By: Neal@Wealth Pilgrim

Neal@Wealth Pilgrim — Mon, 15 Feb 2010 04:00:00 +0000

Len….excellent point. Well worth the focus. Thanks.

By: Len Penzo

Len Penzo — Sun, 14 Feb 2010 23:02:26 +0000

Although it was kind of implied in the other steps, Neal, I think this step needs to be explicitly called out:

If you aren’t satisfied the return is accurate: DON’T SIGN THE RETURN! It is your responsibility to ensure the return your spouse submits to the IRS is accurate.
.-= Len Penzo´s last blog ..Black Coffee: My Favorite Blogs, Money News & Opinions #33 (Decaf Edition) =-.

By: Neal@Wealth Pilgrim

Neal@Wealth Pilgrim — Fri, 12 Feb 2010 22:40:13 +0000

I think your comment absolutely fits the context and I agree that the marriage issue is core. I’m glad you brought it up Erik.

By: Erik

Erik — Fri, 12 Feb 2010 19:14:55 +0000

I was taking issue with the only advice being “seek legal and tax advice”. To me, that’s only the symptom, not the root of the problem. Yes, these would be important steps, but the core issue here is a marriage that needs serious help…something most lawyers and CPAs can’t do much with. But as this is a post on wealth matters, perhaps that doesn’t fit the context.

By: Neal@Wealth Pilgrim

Neal@Wealth Pilgrim — Fri, 12 Feb 2010 15:27:43 +0000

Erik,

Thanks again. I completely agree that separating the accounts isn’t anywhere near sufficient. That’s why I suggested the spouse seek professional guidance immediately.

By: Erik

Erik — Fri, 12 Feb 2010 14:32:59 +0000

How about some serious marriage counseling? Both parties are at fault here: Tim is a liar playing an illegal game that seriously jeopardizes his and his family’s. Roberta is at best naïve, and at worst is an accomplice.
It strikes me as odd to suggest “protecting yourself” by getting separate accounts and credit cards. Then what? Let the cheating spouse continue cheating? That’s like suggesting a wife letting her husband continue fooling around with a mistress but insist that she wear a female condom to protect herself from STDs. C’mon.
When you get married (even with a JP in the courthouse) there should be a team formed, that is, two parties working together in a trusting relationship. Splitting finances or donating money to charity just covers up the symptom, it doesn’t address the problem. I hate paying too much in taxes just like most Americans; however, there are legal remedies. Take deductions where they are allowed, invest in tax exempt municipal bonds, stash money in ROTH IRA to reduce retirement income tax. And for goodness sake, sit down with your spouse each month and go over the budget. That keeps both parties honest, informed and working together, the hallmark of all successful marriages.

By: Neal@Wealth Pilgrim

Neal@Wealth Pilgrim — Wed, 10 Feb 2010 05:08:02 +0000

Absolutely correct. There are actually a few things you could do. I was considering doing an entire post on the options….