Tax Liens & "Unknowing Spouse" law/rule

[rbarringer]

What is the name of your state (only U.S. law)? Ohio

Had a business in Ohio for approximately 8 years and found out almost 2 years ago that my spouse had not been filing personal and/or business taxes. Not even paying the quarterly taxes, employee taxes, etc. Have been audited and to court and now have a tax lien. I have been informed that there is a law titled "unknowing spouse". Looking for the specifics on this to determine if I qualify. I have new employment and want to get something worked out before it get to the point of garnishments, etc.What is the name of your state (only U.S. law)?

[LdiJ]

Originally Posted by rbarringer

What is the name of your state (only U.S. law)? Ohio

Had a business in Ohio for approximately 8 years and found out almost 2 years ago that my spouse had not been filing personal and/or business taxes. Not even paying the quarterly taxes, employee taxes, etc. Have been audited and to court and now have a tax lien. I have been informed that there is a law titled "unknowing spouse". Looking for the specifics on this to determine if I qualify. I have new employment and want to get something worked out before it get to the point of garnishments, etc.What is the name of your state (only U.S. law)?

I cannot really answer that question without more information. Who owned the business? Were both of you working in the business? In what capacities? Have you filed the tax returns now or just accept what the IRS stated was owed? Did you file jointly?

The term you are looking for is Innocent Spouse Relief. However, whether or not you could qualify depends on the exact situation.

[Kiawah]

Check IRS Pub 334, chapter 11
[url]http://www.irs.gov/pub/irs-pdf/p334.pdf[/url]

Pub 971 (Innocent Spouse Relief)
[url]http://www.irs.gov/pub/irs-pdf/p971.pdf[/url]

Form 8857

[davew128]

Who owned the business, who operated it, and who was responsible for paying employee taxes?

[rbarringer]

I let (and trusted) my spouse to take care of all of the legal and business aspects of the business (medical). My spouse opened a corporation and set up a business account as a DBA. My personal name and DBA the practice.

My spouse worked for me as the Office Manager and handled all aspects of the business and finance end. I was the physician. I later found out that my spouse was paying themself a monthly salary, which I was unaware. I then started being told that the business was failing and I could not understand why. So I would say we both worked for the practice but I owned it.

I later found out by means of being served that spouse had not been filing taxes or paying any taxes associated with the business. The IRS auditors requested all records and we went to court. Again spouse handled everything and I thought there was going to be a payment plan worked out. Spouse keeps telling me that nothing has been done but there is a tax lien now filed in both of our names. And yes, we were filing jointly.

This took place in Ohio and now we have moved to a community property state. If I should qualify for "innocent spouse relief" what happens to the spouse.

I am ready to take this matter into my own hands and my family has been researching everything and can not find my spouse listed as an active attorney which they were and keeps saying they still are. My spouse also told me that there are no papers required for the business as far as corporation papers and medical is exempt. We have determined this to be false by contact with the state of Ohio. Also I have now been told that the FED TAX ID was applied for in my name alone, not the business and there are not even papers to prove that I have a legal DBA.

I want to consult a tax attorney and my spouse keeps postponing. I want to handle this before my new medical career is jeoporadized and they begin garnishment and hurts my career with this new hospital and practice that I am affiliated with.

I have trusted this person for 17 years and now I am finding out things that scares me. Since they are and say they still are an attorney I am not confident I can accomplish this. They know ins and outs. My family keeps telling me there is an attorney out there that will help me with this and not care about my spouse's status in the legal system.

[LdiJ]

Originally Posted by rbarringer

I let (and trusted) my spouse to take care of all of the legal and business aspects of the business (medical). My spouse opened a corporation and set up a business account as a DBA. My personal name and DBA the practice.

My spouse worked for me as the Office Manager and handled all aspects of the business and finance end. I was the physician. I later found out that my spouse was paying themself a monthly salary, which I was unaware. I then started being told that the business was failing and I could not understand why. So I would say we both worked for the practice but I owned it.

I later found out by means of being served that spouse had not been filing taxes or paying any taxes associated with the business. The IRS auditors requested all records and we went to court. Again spouse handled everything and I thought there was going to be a payment plan worked out. Spouse keeps telling me that nothing has been done but there is a tax lien now filed in both of our names. And yes, we were filing jointly.

This took place in Ohio and now we have moved to a community property state. If I should qualify for "innocent spouse relief" what happens to the spouse.

I am ready to take this matter into my own hands and my family has been researching everything and can not find my spouse listed as an active attorney which they were and keeps saying they still are. My spouse also told me that there are no papers required for the business as far as corporation papers and medical is exempt. We have determined this to be false by contact with the state of Ohio. Also I have now been told that the FED TAX ID was applied for in my name alone, not the business and there are not even papers to prove that I have a legal DBA.

I want to consult a tax attorney and my spouse keeps postponing. I want to handle this before my new medical career is jeoporadized and they begin garnishment and hurts my career with this new hospital and practice that I am affiliated with.

I have trusted this person for 17 years and now I am finding out things that scares me. Since they are and say they still are an attorney I am not confident I can accomplish this. They know ins and outs. My family keeps telling me there is an attorney out there that will help me with this and not care about my spouse's status in the legal system.

You need a tax attorney, like yesterday, and you need to completely forget about/ignore whatever your spouse is doing and work on protecting yourself.

However, It doesn't appear that a corporation was ever opened. It appears that you were doing business under your own name, with a DBA. That does not make your business a corporation.

[davew128]

LDiJ said it far kinder than I would have with regards to getting an attorney.

It sounds as though both you and your husband have both been considered responsible persons for unpaid employment taxes as well as any income tax that was assessed. That alone makes it difficult to claim innocent spouse status because the IRS is saying you were responsible or should have been responsible. Moving to a community property state doesn't change anything and responsible person penalties do not recognize community property laws.

I think you still have options, but you need to get your own tax attorney rather the foolishly relying on the person who's conduct get you into and continues to keep you in this mess.

[tranquility]

I agree with the others. This does not seem an innocent-spouse type of situation. A tax attorney is the best option as you are going to have some battles with others and he would be best to advise.

[rbarringer]

The State of Ohio states that if a DBA was opened it still needed to be registered with their office and they have no record. Does this put me out there even more. As far as the taxes, I have signed all of the tax returns each year and spouse never sent them in apparently. As Office Manager receiving a pay check (and I remind you, I never knew about this until it was uncovered) does this put spouse at some fault as far as evading taxes as far as quarterly and payroll? I am still shocked that my spouse that is a lawyer per say (I don't even know this to be true anymore, can not even find anything out there showing is an active, practicing attorney in good status) and a priest did this**************.love is blind.....and STUPID...

[rbarringer]

Originally Posted by rbarringer

The State of Ohio states that if a DBA was opened it still needed to be registered with their office and they have no record. Does this put me out there even more. As far as the taxes, I have signed all of the tax returns each year and spouse never sent them in apparently. As Office Manager receiving a pay check (and I remind you, I never knew about this until it was uncovered) does this put spouse at some fault as far as evading taxes as far as quarterly and payroll? I am still shocked that my spouse that is a lawyer per say (I don't even know this to be true anymore, can not even find anything out there showing is an active, practicing attorney in good status) and a person of the cloth did this**************.love is blind.....and STUPID...

They will have to answer to someone one day!!!

[davew128]

Originally Posted by rbarringer

The State of Ohio states that if a DBA was opened it still needed to be registered with their office and they have no record. Does this put me out there even more.

The least of your problems and wholly insignificant in the overall scheme of things.

As far as the taxes, I have signed all of the tax returns each year and spouse never sent them in apparently. As Office Manager receiving a pay check (and I remind you, I never knew about this until it was uncovered) does this put spouse at some fault as far as evading taxes as far as quarterly and payroll?

You're not listening. Whether or not your husband is at fault doesn't mean you are not. As the business owner, you are ultimately considered A responsible person for employment taxes just as HE is considered A responsible person as the office manager. Ultimately the IRS doesn't care which responsible person pays them and when it comes to these matters, they will go after every person who conceivably could be responsible when it came to making sure these taxes were timely paid.

Example: You hire a payroll company to handle your payroll and payroll taxes. Payroll company is fraudulent and steals the money set aside for payroll taxes and then drops off the map. Despite the fact that you were essentially robbed, it is still your responsibility to make sure the government is paid those taxes. Fair? No. Legal? Yes, absolutely because the government wasn't a party to your arrangement with the payroll company.

Regarding the income tax problem, it sounds like aside from what you paid him, that the income was all yours anyway and if the returns weren't filed and the tax was never paid....well then you still owe the money in the first place. I don't see what the problem is.

Bottom line: Hire a tax attorney YESTERDAY.

[rbarringer]

Thanks for everyone's input. It all was greatly appreciated and heard loud and clear. I have already obtain good names of great tax attorneys and the next step is to go for the consultation and get started down a long and expensive road. Thanks again to all.