Is my spouse responsible for my LLC tax debts?
LLC Tax Debts
The answer to this question depends on the fact and circumstances of each individual situation. There are times when a spouse would not be responsible and there are other situations where the spouse is definitely responsible.
Here are some circumstances that would be factors:
Arizona is a community property state. That means that both the IRS and the Arizona Department of Revenue can consider the income from both spouses to be considered earned 50/50 by each spouse even if they file separate returns.
LLC’s can be taxed as sole proprietorships, partnerships, C corporations or S corporations. The type of entity you have elected to be taxed as will have an impact of a spouse’s liability of the LLC tax debt.
The type of tax is critical. If it is payroll taxes and the spouse was preparing the payroll and had check signing authority would make the spouse responsible even if they were not an actual owner of the business.
Ownership is also a critical factor. If both spouses are listed as owners and/or officers, then the likelihood of both spouses being held responsible for the taxes is most likely.
Dates of marriage and/or divorce of the marriage will affect the chances of the “innocent spouse” being held responsible or not responsible for LLC tax debts.
There are many other factors that can affect the spouse’s responsibility for tax debt. It is best to consult with a knowledgeable tax representative to get a specific answer based upon the facts and circumstances of your situation.
Scott Allen E. A.
Tax Debt Advisors, Inc