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Chronology of events:
Married in 1996, man, age 21
Husband main income earner, wife worked sporadically, Married filing joint taxes
Husband joins military in 1999
Couple purchase home in 2001
Exit military in 2003
Husband cannot find job in military town
Dec 2004 House foreclosed upon
Couple liquidates assets (vehicles, etc) to put together enough money to move back to hometown and start over
They move into 1Bdrm with some furniture, clothes and 2 cars
Feb 2005 Husband finds job
April 2005 Husband suspects and accuses Wife of infidelity. Marriage breaks-up, Wife moves to another state, lives with another man
Husband continues to provide some financial support in the form of maintaining vehicle loan and insurance payments for wife's car, while also paying back creditors
Hope-filled attempted reconciliation in 2007, Wife moved back, 2 weeks later reconciliation fails, wife leaves
By State law the 'clock' starts over (with any cohabitation), again requiring 1-year separation before divorce filing
Note* Husband's other choice was to cite infidelity, but instead desired a 'civil' divorce
2008 Divorce filed by Husband (married filing separate taxes filed). Husband does all paperwork himself, no money for lawyers
Latter part of 2008 Divorce finalized
2009 Man completes repayment to all creditors from failed marriage, man's credit score improves
Latter 2009 Man marries new Wife, lives happily ever after....
UNTIL....
Husband receives letter from IRS stating that ex-wife earned an income and filed taxes in 2007. Husband knew nothing about this. IRS states that conflict of status has triggered a series of penalties, interest and fees totaling nearly $8,000 that he is liable for.
New wife has not yet been told of tax debt, AND they just purchased a home in 2010, expecting to receive the $8,000 tax credit (kiss that goodbye???). IRS says you have until 28 April to pay- OR ELSE!
He has no idea where ex-wife lives, has had no contact with her since reconciliation failed. Only contact has been via court filings during divorce proceedings.
Husband seeks tax-expert who says that unless he secures the ex-wife's agreement, he will have to pay the $8,000 as he filled out and signed the tax returns. Tax-Expert says that with her cooperation they can re-file (probably still have penalties - but nowhere near $8k). Husband seeks out lawyer, who also says he's screwed. He followed tax-expert's advice to make payment agreement with IRS and agrees to pay $127/month until the debt is repaid or he finds other solution.
What should he do?
Married in 1996, man, age 21
Husband main income earner, wife worked sporadically, Married filing joint taxes
Husband joins military in 1999
Couple purchase home in 2001
Exit military in 2003
Husband cannot find job in military town
Dec 2004 House foreclosed upon
Couple liquidates assets (vehicles, etc) to put together enough money to move back to hometown and start over
They move into 1Bdrm with some furniture, clothes and 2 cars
Feb 2005 Husband finds job
April 2005 Husband suspects and accuses Wife of infidelity. Marriage breaks-up, Wife moves to another state, lives with another man
Husband continues to provide some financial support in the form of maintaining vehicle loan and insurance payments for wife's car, while also paying back creditors
Hope-filled attempted reconciliation in 2007, Wife moved back, 2 weeks later reconciliation fails, wife leaves
By State law the 'clock' starts over (with any cohabitation), again requiring 1-year separation before divorce filing
Note* Husband's other choice was to cite infidelity, but instead desired a 'civil' divorce
2008 Divorce filed by Husband (married filing separate taxes filed). Husband does all paperwork himself, no money for lawyers
Latter part of 2008 Divorce finalized
2009 Man completes repayment to all creditors from failed marriage, man's credit score improves
Latter 2009 Man marries new Wife, lives happily ever after....
UNTIL....
Husband receives letter from IRS stating that ex-wife earned an income and filed taxes in 2007. Husband knew nothing about this. IRS states that conflict of status has triggered a series of penalties, interest and fees totaling nearly $8,000 that he is liable for.
New wife has not yet been told of tax debt, AND they just purchased a home in 2010, expecting to receive the $8,000 tax credit (kiss that goodbye???). IRS says you have until 28 April to pay- OR ELSE!
He has no idea where ex-wife lives, has had no contact with her since reconciliation failed. Only contact has been via court filings during divorce proceedings.
Husband seeks tax-expert who says that unless he secures the ex-wife's agreement, he will have to pay the $8,000 as he filled out and signed the tax returns. Tax-Expert says that with her cooperation they can re-file (probably still have penalties - but nowhere near $8k). Husband seeks out lawyer, who also says he's screwed. He followed tax-expert's advice to make payment agreement with IRS and agrees to pay $127/month until the debt is repaid or he finds other solution.
What should he do?