Nolo's Essential Guide to Divorce - Emily Doskow [22]
If you do file jointly, you are 100% responsible for any taxes due. (So is your spouse.) And if you file jointly and are entitled to a refund, you must figure out how to divide it just as you do all of your other shared assets.
The "Innocent Spouse" Rule
The IRS allows for the fact that sometimes one partner in a marriage prepares joint tax returns that the other spouse signs without knowing what's actually in them. The Innocent Spouse Rule says that a spouse who unknowingly signs a fraudulent tax return can be excused from liability for penalties based on that return.
It's difficult to prove that you were an innocent spouse, but if you've been victimized by your spouse's overreaching on a tax return, give it a try. IRS Publication 971, available at www.irs.gov, has the information you'll need to get started learning about these rules. Divorce & Money, by Violet Woodhouse (Nolo), also has extensive information about innocent spouse rules. If you think you have a problem after reviewing these materials, talk to a tax expert. (To avoid problems, have your own accountant review joint tax returns before you sign them.)
The IRS can actually help. For details on the ins and outs of taxes and divorce, check out the comprehensive IRS publication Divorced or Separated Individuals. It's IRS Publication 504, available at www.irs.gov or by calling 800829-3676.
Protect Your Valuable Separate Property
If you're worried that your spouse might take, or even damage, any particularly valuable items of your separate property, protect them. If you have larger items, like art or furniture, that belong solely to you, you might want to rent a storage unit and move them there. Smaller items, like jewelry or important and valuable papers, can go in a safe deposit box or be left with a trusted friend. Be sure to do this before divorce papers are filed. And be sure to document everything you do by having a witness or videotaping the property in your home and then in the storage unit.
Close Joint Credit Accounts
Even in the crisis time after you first separate, the bills have to be paid. Make sure that you decide who will pay which ones, especially ones that might trigger late fees or hurt your credit rating if you miss a payment. Both of you are responsible for all of the debts that you incurred together before you separated-and if you live in a community property state, possibly for some debts incurred by either of you after separation as well.
Whether or not you trust your spouse to continue to be responsible with your joint credit, get in there and close the accounts, using the process described below. If you don't, your good credit could be at risk from your spouse's actions.
If your spouse runs up debts on a joint credit card account after you separate and doesn't pay, the creditors won't pay any attention to your date of separation-they'll come after you because you are the other owner of the account. And although you might eventually get your spouse to reimburse you for whatever you have to pay, you'll go through a lot of hassle getting there, not to mention the potential for damage to your credit rating. (There's more about dealing with debts in Chapter 10.)
Before you close joint accounts, make sure you'll be able to establish credit in your own name. If you don't have a separate credit card account, be sure to open one before closing joint accounts. If you can't get credit in your own name and you think you'll need to use the credit cards you have, then it's probably better not to close the account-although you'll bear the risk that your spouse will be irresponsible with credit, you'll also be sure that you have the resources you need. (See "Get Your Own Credit Card," below.)
To close a joint credit account, write to the credit card issuer with your instructions. (There's sure to be a customer service address on your statement,