Tax Question

In our agreement it states we will split any tax refund or tax liability from the final year we filed jointly. Since it was 1099 income, marital norms were for taxes to be set aside and paid back to the family joint account at the end of the year. My ex chose to spend that money. I adjusted the 50% of the refund given accordingly, but am now getting letters that she is owed the full 50%.

Is this correct? While this scenario is not specifically called out in our agreement, it seems to go against the spirit of it. If I stopped paying taxes and owed tens of thousands in back taxes, would my ex be responsible for splitting that liability with me? I assume not…

How would a mediator and/or the courts rule in this matter?

If you have a final and fully executed separation agreement or a permanent court order addressing this and the document says to pay your spouse 50% of the tax refund, you are to pay her 50% of the total refund.

Without it explicitly stated in the final binding document that you can deduct taxes that were to be set aside, you cannot do this.

If you stopped paying taxes and owed tens of thousands in back taxes during a year in which your final separation agreement or court order says you are to divide the refund or liability, then yes, she would also be responsible to pay 50% of the total amount owed.

Anna Ayscue

Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest

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