Oregon Tax Consultants Practice Exam

If a divorce decree states that the husband is responsible for tax debt, who is ultimately responsible?

1. The husband is solely responsible

2. Both parties are jointly liable for any tax years filed jointly

3. The tax authorities will decide based on income

4. Neither party is responsible if it is stated in court

The correct answer is: Both parties are jointly liable for any tax years filed jointly

In a divorce decree, while it may specify that one spouse is responsible for the tax debt, this does not fully absolve the other spouse from responsibility, particularly if the couple filed joint tax returns during the marriage. The tax authorities treat joint filers as jointly and severally liable for any taxes owed. This means that both parties can be held accountable for the entire tax liability, regardless of the divorce decree. Even if the decree assigns responsibility to one spouse, this allocation does not affect the IRS or state tax authority's ability to collect the debt from either one of them. Therefore, if there are outstanding taxes from years when both spouses filed jointly, both parties remain at risk for the tax liability, making the designated individual responsible in the decree potentially liable for the situation but not exclusively responsible in the eyes of the tax authorities. This principle highlights the importance of understanding how tax liabilities are structured during and after a marriage, especially in legal contexts such as divorce.