Long Island stay-at-home Wife files for divorce in 2008, after twenty-one years of marriage.
Husband owns a contracting business.
Shortly before trial in their divorce, Husband, acting unilaterally and of his own volition, files amended joint tax returns for 2004 through 2007.
In the amended returns, which do not bear Wife’s signature, Husband confesses (or discloses) $1.6 million in income he previously did not report for his business.
Husband also includes a list of marital assets from which the Internal Revenue Service may collect the back taxes, including the couple’s million dollar home.
At trial, the Husband presents no evidence as to any legitimate reason for suddenly becoming a good citizen and amending the tax returns.
Instead, the divorce court holds that Husband acted solely out of malice, with the intention that Wife bear the brunt of at least half of the tax liability eroding her award of her share of marital property in their divorce.
And the family court does something quite extraordinary. It hoists the Husband on his own petard.
The court allocates the entire tax liability to the Husband and his share of the marital property, in effect, insulating the Wife from liability for the couple’s taxes for those years.
Absent Husband’s malicious, egregrious conduct toward the Wife, Wife would be responsible for half of the couple’s tax liability.