Divorce can impact taxes for Nevada couples
There are two unpleasant realities for some people to face as they grow older. Those realities that are so unwelcome for many people are taxes and divorce; and they can be especially challenging when they need to be considered in conjunction with each other. It is essential for Nevada couples who are going through a divorce to know how that process can affect taxes and the chances of getting audited.
There may be high asset divorce cases that call for the use of a forensic auditor. This process entails uncovering hidden assets and finances. When these items are disclosed in court during a divorce case, the judge also can report these items to the IRS. This can lead to an audit as these financial assets may have not been claimed before and can lead to inconsistencies in tax filings.
An IRS audit can take some time and be a complete surprise to the spouse who was unaware of any discrepancies or hidden assets before a forensic audit uncovered any. In that kind of situation, there is relief for those who didn’t know. They can legally file what is called “innocent spouse relief." This is essentially a declaration that one spouse may not be responsible for the tax problems of the other.
Taxes are complex for even those couples who are seeking an amicable and relatively simple divorce. However, anyone in Nevada who foresees tax problems as potentially affecting the other party after a divorce may benefit from making that party aware of the issue. If either party feels that they are being wrongfully held responsible for the tax problems of an ex-spouse, or soon to be ex-spouse, they may benefit from learning more about their legal options for relief.
Source: forbes.com, Divorce Causes Tax Audits, Cameron Keng, Feb. 10, 2014