Don’t mess with the IRS, or with your ex-wife, for that matter. A Long Island contractor decided to unilaterally file marital tax returns for the years 2004 through 2007 and report $1.6 million of income just days before his divorce trial was set to take place. He hoped to prevent his wife from recovering marital assets by apportioning $500,000 to $1.2 million of new tax liability to her as a result of the unpaid taxes.
Slimy? Scummy? Sleezy? The Suffolk County judge called the husband’s act “despicable.” “It is well settled that expenses (including unpaid taxes) incurred prior to the commencement of a divorce action constitute marital debt which, under normal circumstances, should be equally shared by the parties. However, in those rare instances where a party’s conduct in creating a debt is so egregious, shocking, fraudulent or malicious, the Court can exercise its discretion and refuse to apportion the debt, Acting Supreme Court Justice Andrew A. Crecca wrote in Maria C. v. Dominick C.
Judge Crecca decided that this was one such instance as he refused to apportion the couple’s outstanding tax liability to the wife. He concluded that the husband’s conduct was “based solely on malice and revenge, with no other goal than to prevent his wife from any recovery in equitable distribution.”
The IRS, however, is not bound by the court’s ruling, but the wife’s attorney believes that “they will give it the appropriate weight.”
Just another reason to pay your taxes. If you don’t, you could end up paying double, like this guy.
**This is not legal advice. If you or someone you know is considering getting divorced, contact The Mandel Law Firm today for a free consultation to review your options.