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returns were filed in April 1993. Petitioner and Mr. Barber
later filed joint returns for 1992, 1993, and 1994.
On the 1987 joint return, the year at issue, petitioner
reported her income of $18,923 from ACBJ. Mr. Barber reported
self-employment income of $6,798 from his business. The tax due
was $3,442, which included $835 in self-employment tax. After
subtracting $1,746 in Federal income tax withholdings, the 1987
return reflected a balance due of $1,696. No payments were
submitted with the 1987 through 1991 returns. Petitioner and Mr.
Barber initially intended to execute and pay their delinquent
taxes through an installment agreement with the IRS; however,
they did not follow through with that intention.
Petitioner and Mr. Barber first separated in early 1995.
The couple reconciled in July 1995 through February or March
1996. Thereafter petitioner instituted divorce proceedings. A
final decree of divorce was issued in December 1998. The divorce
decree included a provision placing responsibility for the
payment of past tax debts on Mr. Barber. The decree ordered:
that the Respondent [Mr. Barber] assume responsibility for
the entire debt currently due and owing to the Internal
Revenue Service in the approximate sum of $30,000. The
Respondent shall assume said debt and shall indemnify and
hold harmless the Petitioner from his failure to pay same.
In exchange for this provision, petitioner did not make any claim
to her share of the couple’s equity in the marital home or to
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