What is the name of your state? Florida
My wife and I got married in July, 2006. Now that it is time for taxes, I have found out that my wife gave a friend her SSN to work (her friend is an illegal). My wife is foreign and honestly did not understand the implications of such an act. (she thought she was doing good by paying taxes and also helping a friend--I explained to her that the government does not see it that way AT ALL). In addition, I have found out that the employer will be issuing a 1099 for the income, which I estimate is around $31,000. (the 1099 will be in my wife's name). Incidentally, this "employer" will not be able to get us the 1099 until at least February--which is past the due date (is there anything I can do about this?)
Aside from the obvious, (I was furious when she told me what she did--she seriously almost earned herself a divorce), we are now liable for taxes on that amount, and probably would have had to be making monthly tax deposits. The taxes owed plus the penalties are not going to be good. She says her "friend" will pay us, but I am not holding my breath. If I'm doing my math right, it will be a rather substantial sum of money owed--money that we cannot afford.
In an attempt to protect myself from her illegal activities, it may be best for us to file separately this year. In addition, does "Innocent Spouse Relief" as defined in Publication 971 provide me any protection? I am also a small business owner (paid as an employee, only), but the business is a Class C Corp, with it's own 1120 returns, so I do not believe that is relevant.
Any information would be GREATLY appreciated.
My wife and I got married in July, 2006. Now that it is time for taxes, I have found out that my wife gave a friend her SSN to work (her friend is an illegal). My wife is foreign and honestly did not understand the implications of such an act. (she thought she was doing good by paying taxes and also helping a friend--I explained to her that the government does not see it that way AT ALL). In addition, I have found out that the employer will be issuing a 1099 for the income, which I estimate is around $31,000. (the 1099 will be in my wife's name). Incidentally, this "employer" will not be able to get us the 1099 until at least February--which is past the due date (is there anything I can do about this?)
Aside from the obvious, (I was furious when she told me what she did--she seriously almost earned herself a divorce), we are now liable for taxes on that amount, and probably would have had to be making monthly tax deposits. The taxes owed plus the penalties are not going to be good. She says her "friend" will pay us, but I am not holding my breath. If I'm doing my math right, it will be a rather substantial sum of money owed--money that we cannot afford.
In an attempt to protect myself from her illegal activities, it may be best for us to file separately this year. In addition, does "Innocent Spouse Relief" as defined in Publication 971 provide me any protection? I am also a small business owner (paid as an employee, only), but the business is a Class C Corp, with it's own 1120 returns, so I do not believe that is relevant.
Any information would be GREATLY appreciated.