One of the commonly known rules about our criminal justice system is that spouses can't be forced to testify against each other. What's less known is how one spouse's tax debt can affect the other spouse's assets.

For the IRS, the key question about whether the IRS can pursue one spouse's assets for the other spouse's tax debt is how the couple filed. Those who choose married filing separately are less likely to have the IRS put a lien on any property they own individually. The IRS is unlikely to use a spouse's assets to satisfy the other spouse's debt when a couple each files their own tax return.

For couples filing jointly, however, the IRS views all assets as a potential source of satisfying a tax debt. For example, Spouse A has a lake cabin. The cabin's deed lists Spouse A as the sole owner. Spouse B has accrued tax debt. The IRS can put a lien on Spouse A's property even though Spouse B is primarily responsible for the couple having unpaid taxes.

In seeking to satisfy a tax debt, the IRS can go after either spouse's wages, bank accounts, or other assets. This is one reason why it's important to communicate with the IRS, even if you are unable to pay a tax debt immediately.

Innocent Spouse Relief

For individuals who filed a joint return with their spouse and were unaware of their spouse's errors on their tax return, they may be eligible for innocent spouse relief. Taxpayers must reside in a community property state to be eligible for this option.

Innocent spouse relief isn't available to taxpayers when the errors are either theirs or when they fall on both parties. For example, innocent spouse relief is not available for mistakes related to business taxes, but it can apply if one spouse underreports their income and the other spouse was unaware of the failure to report.

If you have questions about how marital status can affect tax liability, call Senior Partner, Tax Controversy Attorney, and former IRS attorney Brandon A. Keim at (602) 200-7399 or contact him online to discuss your options.