How To Prevent IRS Tax Debt From Affecting Your Marriage

How are we going to pay our bills?”

“What are we going to do?”

“How could you get us into this terrible financial situation?”

The grandfather clock in the corner of the living room strikes 11:00 p.m. as Jane Richards pummels her husband with questions about their dire financial situation. Her husband, Alan, slumps with his elbows propped on their dining room table, head in hands. They have been arguing for the last couple of hours; ever since their three children went to sleep at the other end of the house.

Alan, now 43 years old, has been struggling in his small retail business for the last few years. No matter what he did he just couldn't bring in enough money to pay all of his bills. He made sure that he paid his employees their salaries. After all, he couldn't do business without them. But, he just couldn't pay the withholding tax every month. Before he knew it he owed the Internal Revenue Service in excess of $126,000 in back employment taxes, penalties and interest. The IRS has been sending threatening letters. Then, just yesterday, an IRS Revenue Officer showed up unannounced at his business demanding payment and threatening to close his doors.

Alan and Jane have no savings. Whatever little money they did have has been sunk into the business to keep it going. Jane wasn't aware of the tax problem or the fact that Alan has been using all of their money to keep the business going. That is, until the IRS letters started coming to the house. Now they were being threatened with having their bank accounts and property taken by the IRS.

The tension is at a crescendo now. Jane is worried beyond her ability to handle the situation and she and Alan are continually fighting. Jane is scared and wants Alan to resolve the problem, but Alan has no idea where to turn or what to do.

Alan is searching on his laptop for someone to help them with this problem. Two days later he finds himself in my waiting room.

He is alone.

Alan tells me about his situation and then confides in me that Jane has taken the children and gone to her parents' house.

She is threatening to divorce him.

I have seen this scenario many times before. I am a lawyer. I am not a psychologist, but I know that this couple most likely was having some marital difficulty before the tax problem showed up. The tax problem is just the most current problem that is putting pressure on this couple. There is no question that they are both in it together. Alan has been running his business as a sole proprietor. This is the poorest choice that he could have made, but he didn't get any guidance when starting his business. It doesn't matter. Money is tight and their lives are falling apart.

After Alan and I talk for a while, he understands that there is a way out of his predicament, but that it is going to take some work and some time. He explains to me that his wife doesn't want anything to do with the tax problem. He tells me that she made it clear to him that it was his problem alone to fix. She is ready to divorce him over it. At least that is her stance at the moment. All of the troubles in their marriage were made heavier with this tax problem and the threats from the IRS.

I tell Alan that I am willing to talk to his wife.  Although he says that she won't come in, I ask if he could get her here.

One week later the two of them are sitting in my waiting room. I extend my hand to Jane and introduce myself. She reluctantly shakes my hand but says nothing. The corners of her mouth are taught and set. Her eyes look at the floor. As she follows her husband into my office her shoulders slump and her gaze is indifferent.

As I normally do, I try to engage her in some cordial conversation before talking business, but she is having none of it. She is nonresponsive.

I have seen this many times before.

I start explaining to the couple what I had gone over with Alan at our previous meeting. Jane isn't buying what I am saying. She is determined to be angry and distant. Her eyes are steely and her facial muscles are as tight as the cables on a suspension bridge.

I continue talking. Then I turn to Jane and ask her if she has anything to ask or to say in general about all of this. She stares at me. She raises her voice and starts on a rant about how Alan had gotten them in financial trouble. Then, slowly, she starts to ask me questions.


I explain to Jane that if she and her husband do not cooperate with each other in the resolution of the tax problem that it would be more difficult to resolve. We also talk about the situation that would occur if they did decide to separate or get a divorce. She acknowledges that she understands that even in that situation the tax matter could be resolved so that both of them would be out of trouble if they cooperated in its resolution.

If they didn't cooperate and started fighting each other, I would have to withdraw from representing either of them as their fighting would cause a conflict of interest for me and I could not represent either one of them. This would just delay any resolution of the tax debt and would cause further expense. Someone new would have to be hired to represent either one or both of them.

By the time that we finish talking she sees that there are reasonable ways out of this situation. She is able to see that there is light at the end of their tax debt tunnel.

By the time that Jane leaves my office she is smiling and joking with me. Her previous lack of knowledge about the tax situation caused her to fear the worst. She still held Alan responsible for putting their family in jeopardy, but now she understands what they could do about it.

They still fought, but they cooperated enough to beat their problem with the IRS.


Tax problems are frightening, especially if you have no knowledge about what steps are available to you to fix them. But, they don't have to cause problems in your marriage. Learning more about the problem and having someone who is experienced in resolving these types of problems can lessen your financial fears. It is always better to cooperate as a couple in approaching tax debt problems even if the rest of your marriage is falling apart.

Financial problems are one of the top sources of discord in marriage. Even though statistics prove this, most married couples know that they have had fights over finances at least some time in their marriage.

Tax debt is usually the culmination of a couple's failure to realize that their financial knowledge is lacking and their failure to work together in making decisions about how they are spending their money.

Marital discord is a complicated and vexing area. But, there are steps that married couples can take to deal with financial problems and tax debt. It certainly would be wise to seek professional help in dealing with marital discord. However, where financial problems end up in tax debt it would be wise to obtain the services of an attorney experienced in tax debt resolution. In order to prevent financial problems in the future, it would be wise to obtain the services of an experienced financial planner. Also, using a tax attorney or accountant to help with tax planning to legally reduce your future tax obligations could save a great deal of money and heartache.

When a small business is involved such as Alan's, it might be a smart thing to get some help in dealing with business matters. An experienced business coach has kept many businesses from falling off the cliff of financial ruin. At the very least the Small Business Administration (SBA) has experienced business people who are available to give advice. Don't think that you have to take everything on your shoulders. Maybe you are not the business person that you think you are. You might be great at the thing that your business does, but you may need some help in learning the business of being in business. Don't be embarrassed. Get the help that you need to avoid financial and marital failure.

(Note: All characters and names are fictional and any resemblance to actual clients is purely coincidental.)