Wednesday, June 10, 2015

Motion To Enforce Equitable Distribution Of Tax Liability

In Lewis v. Lewis, a post-judgment case to enforce of litigant's rights, the Plaintiff appealed from a Court Order that required her to pay debt owed to the IRS when it was unclear whether the court was provided with the IRS's determination that granted her innocent spouse relief. The Appellate Court remanded the case back to the Family Court for reconsideration. The parties were married in 1996 and divorced in 2006. Their property settlement agreement (PSA) submitted with their final divorce judgment included the following language: "With respect to certain outstanding Internal Revenue Service debt, on account of 2004 income, the parties agree . . . each shall be responsible and pay, when as due, fifty (50% of this debt . . . ." In 2014, the Family Court held that the Plaintiff was in violation of litigants' rights for failure to pay her portion, including interest and penalties. The Plaintiff filed an appeal. A ruling on enforcement Motions in matrimonial actions must be "reviewed for abuse of discretion, with deference to the expertise of Family Part judges." Costa v. Costa, 440 N.J. Super. 1, 4, 111 A.3d 97 (App. Div. 2015). According to the Appellate Court, spouses who file joint federal income tax returns are held jointly and severally liable for any amounts due. 26 U.S.C.A. § 6013(d)(3). "Innocent Spouse" relief provisions in the IRS Code offer a narrow exception to this, under 26 U.S.C.A. § 6015(b), a spouse may seek relief if the spouse establishes that in signing the tax return the spouse did not know, and had no reason to know, there was an understatement of tax attributable to erroneous items of the other spouse, and that it would be inequitable to hold the spouse liable. On appeal, the Plaintiff attached IRS documents that indicate that she was granted innocent spouse relief by the IRS. She claims that the Defendant filed his Motion to enforce the PSA even though he knew she had been granted innocent spouse relief. The Appellate Division remanded the case back to the Family court solely to allow the Plaintiff the opportunity to file a Motion for reconsideration in the court consistent with Court Rule 4:49-2, and holding that such a Motion shall be considered timely if it is filed within twenty (20) days after service of the opinion on the Defendant. If you believe that a post-judgment modification to settlement agreement regarding equitable distribution, alimony, or any other issue may be beneficial to you it is critical that you seek out the advice of an experienced attorney before moving forward. For more information about post-judgment modification, equitable distribution, child relocation, or other family law matters in New Jersey visit This blog is for informational purposes and in no way is intended to replace the advice if an attorney.

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