My wife did not pay her taxes back in 04-06; I was not in picture; I had the taxes done and she owes 15; HELP

Question

My wife did not pay her taxes back in 04-06; I was not in picture; I had the taxes done and she owes 15; HELP we are in a bad financia position right now; I am unemployed basicaly; i am in the mortgage business and making no money; she makes about 1700 a month; our bills are at least 3800; we are living off credit cards; we are in the process of selling our car to pay these taxes off but now they are saying we owes 6k more in penalties and interest that we dont have the money for; we can afford to take on another payment; we have a house but we owe as much as its worth it might be worth less; i have a rental my mom livs in where we owe about what its worth; she has always paid her taxes but she was with a guy that she handed all of her money over to and said he did her taxes but obviously he didnt; does this sound like the IRS will take an Offer of compromise; we talked to the tax advocacy people and they said they probably would; what i need to know is do they take everything that has to do with me into consideration since i was not with her back then; any help would be appreciated

thanks

Answer 1

Yes the irs will take the household's financial situation into account when working out a budget plan.  But you guys have bigger problems than owing the irs.  You will be bankrupt before the end of the year at the rate you are going.  Both of you need to get 2nd jobs.  Get your monthly income above your expenses.

Answer 2

An offer-in-compromise probably isn't appropriate here. Your wife likely fits the criteria for a hardship deferral. This is where the IRS doesn't pursue collection of the debt due to her financial sitation. Does she have a financial interest in your property? If so, be prepared to supply exact figures concerning present value and amount owed as the IRS generally wants you to attempt to borrow if there is any equity,  

Answer 3

Did your wife actually file the tax returns and now shows she owes? Or did IRS send her a "LTR 2566C" showing she owes, this letter is a 30 day letter giving her the option to file her own return and if she doesn't respond then IRS will file and she will owe the amount stated on the letter.  

She must contact IRS at the phone number listed on her letter if she received one to find out what her options are.

IF she indeed owes she can contact IRS at 1-800-829-0922 or 1-800-829-7650 and let them know she can't pay, IRS will request a Form 433-F Collection Information Statement to be faxed to them while you are on the phone with them and they will review the Form 433F and can put her in "currently not collectible status" interest and penalties will continue to accrue until she full pays the amount.

Offer in compromise is usually denied.  

Answer 4

$15?$1500? Just because they sent her a letter doesnt mean she owes money. She needs to get those tax forms filed. The IRS doesnt know her deductions. Once the returns are filed you will have a better handle on the situation. You can file as an injured spouse so all your taxes do not get taken to pay her tax bill. Maybe you wont owe so much.

Answer 5

An offer in compromise probably would not work because I doubt she has anything to offer and your current situation is a bump in the road and hopefully not a permanant thing.  Most likely, the account will be reported currenty not collectible and will stay on the books but without action until your situation improves.

Answer 6

You had her taxes done and she owes.  I would get a second opinion, as I assume you mean she owes $15,000.

It is important that you either file a separate return from her, or file a joint return along with an injured spouse form, Form 8379, with your tax return.  Your portion of the refund will not be applied to her debt.  

If you own joint assets, those assets will be considered in any Offer in Compromise.