HELP! My new husband didn't file taxes since 2003?

Question

We have received wage and income transcripts that the IRS sent us for 2003-2006 and we finally filed them last week; however, they show interest for his school loans and also some things on house. He and his ex-wife sold the house and supposedly his ex-wife claimed everything regarding the house but it shows up on his wage and income transcripts. How do i find out what she filed or didn't file? She kept the money from the house sale - so how do we fix this? Do i need to file an amendment to claim the interest that he paid on college loans? Sorry for all the questions, but I've called the IRS several times and a recording says they are too busy, call back tomorrow!!!!

We do not have a lot of money and I'm scared to death! Please help!

Answer 1

You need to be pro-active, and get things moving.  Get all of the records together and organized, and contact a tax accountant, CPA or tax attorney.  If he's got a divorce and settlement of some sort, you will probably need an expert to sort it out.  You COULD ask someone like H & R Block if they can help, but their people don't always get great training.  I remember a survey last tax season showed that they made a lot of errors in returns that they processed.  You need experts for this, I think.

Yeah, it'll probably cost you some here.  But he just might be due a refund.  And if you sit on this and try to wish it away, it will only come back bigger and badder and more troublesome.  The IRS always finds you in the end...

And you'll probably have to step up and take over the family finances.  It sounds like your new hubby can't do this all that well...

Answer 2

The IRS transcripts show interest for the student loans and "some things on house" (mortgage payments?) Do you or your husband know that the ex-wife claimed everything, or just think she did. The IRS will not tell you what she did (that would be disclosure). Did HE pay the bill or did SHE pay the bill did THEY pay the bill?

Was the house in her name only? That you could find out from your county recorder of deeds office.

Do you need to file an amended return? Only if it makes enough difference to be worth your trouble to do so. See how much it will save, if anything. 2003 and 2004 are past the statute for refund, so do so only if it reduces tax actually owed.

If the house was in both of their names, you might have to sue the ex-wife to get the money.

The IRS helpline, 800-829-1040, is frequently busy, but if you're persistent, you can usually get through

Answer 3

take a loan out on your house.

Answer 4

1.  Did the 2003 and 2004 tax returns show a refund (which you won't get) or a balance due?  If it's a balance due, yes, you can eventually amend, include the student loan interest and reduce the tax bill.  You can't file the 1040X until the returns are processed.  The return can take 2-4 months to process, so would the 1040X.  (If the amount is modest, you may just want to overlook it.)

2.  As for the house.   Who legally owned the house?  What exactly did he pay?  Can he prove he paid it? How much are we talking anyway?

If he was legally liable for mortgage interest and property taxes and can prove he paid the money to the bank and taxing authority, yes he could itemize.  Yes, if the total was higher than the standard deduction it might reduce taxes owed.  However, the IRS has a right to start asking questions if there is no 1098 to back up his claims to have paid mortgage interest.

See IRS publication 504.

PS to Starlight, the IRS will NEVER just add a deduction to a tax return because it's in the transcripts.  Income yes, tax deduction or credit NO.

Answer 5

WOW that's quiet a situation. here is what i think you might need to do. based on my understanding your husband did not file income taxes since 2003. if that is the case then the first thing you will need to do is file for the years from 2003 through 2007. about the situation with the house,. what form did you get? 1099 or is it a mtg interest? also if the house was sold that your husb. and ex wife owned then there must been some sort of agreement about the proceeds from the sale to be split (maybe in the divorce decree) but you need to find the specifics (which can be kind of weired that your husb has to ask his ex on what she did for taxes) if you guys are not tax savy i recommend asking a prof. for help your situation may not be too bad. you said you don't have a lot of money that might qualify you for some credits which could result in refunds. now for the interest on student loans, they should be deductible but you will deal with that when you file the previous years returns. if you filled return already then you will need to file 1040X (depends on what form you file) to amend the return.

Answer 6

File a 1040X for each year.

Yes you do want to take the interest deduction on the student loans - that's in your favor  http://www.irs.gov/faqs/faq-kw188.html

As far as the house issue goes, he can be released from tax liability read this publication http://www.irs.gov/publications/p504/ar0...

Answer 7

This situation sucks but its not the end of the world. Keep calling the IRS and they can help walk you through it. Get set up with a payment plan for the IRS, file amendments and make sure they are aware that she got the money from the house.

Good Luck  

Answer 8

You can't find out if the ex filed unless she tells you.

The home sale proceeds will probably be exempt from tax.

Your husband should prepare the returns and file them before IRS does it for him.

Answer 9

The first thing is to take a deep breath.  :-)  

At least you've started the ball rolling.  You said you "finally filed them last week."  You filed the returns already without including the additional information from his transcripts?  Is that correct?  Did you claim mortgage interest?

As for what the wife has done, outside of asking her, there's no way to know.  The IRS isn't going to give you or him the information.  If she claimed all the deductions for mortgage interest, etc., he is required to itemize his deductions as well.  IF there was something in the divorce settlement stating she could claim the deductions, there's not much you can do.  The reason it's showing up on his transcripts is probably because his name was listed first on the loan.  This is common.  

He can deduct the portion of mortgage interest that he alone paid that he can prove he paid.  This could trigger her to have to amend her return if she claimed she paid all of it, and in fact did not.

You can file an amended return to pick up the student interest paid.  However, I would do a draft to see how much of a difference it is going to make.  If it's not worth it, I wouldn't bother with it.  **Deleted Info**.  

So, I would wait to see what comes of the returns you just filed.  Even if you continued to call the IRS and managed to get through, they might not be able to tell you much.  The chance that the returns have already been processed is slim.

I hope this helps!!  If you have any other questions, just ask.

**Aside to v b:  Thanks for the heads up.  I knew it wasn't their normal practice, but I could've sworn I'd seen that come across my desk before, but I guess I was mistaken.  Like I say on my profile, I'm not a CPA, an EA, nor do I have my degree just yet, and monitor my answers for reasons like this.  I've learned a lot, but I'll be the first to admit I'm still learning!  I kinda like it that way.  :-)  My apologies to Holly for any confusion.