Can the Court Force You to File Joint Income Tax Returns with Your Spouse During a New Jersey Divorce?
Married couples have the option of filing their tax returns as “married filing jointly” or “married filing separately.” Most couples file jointly because they experience the most tax savings by doing so, although this may not be true in every case.
But what happens when a married couple is going through a divorce in New Jersey? Until the calendar year in which the Judgment of Divorce is entered, the parties still have the right to file their taxes as “married filing jointly.” What do you do if one spouse decides that he or she don’t want to file joint income tax returns? Can the other spouse request that the Court compel the filing of joint income tax returns?
This was the issue was addressed in the Appellate Division case of Bursztyn v. Bursztyn, 379 N.J. Super. 385 (App. Div. 2005). In Bursztyn, the husband worked as a radiologist and earned a significant income and the wife was a homemaker. At the time of their divorce, they had not filed income tax returns for the prior three years, and they had an estimated tax liability of several hundred thousand dollars for these years of unfiled returns. A joint tax expert advised that the couple would experience significant tax savings if they filed those back tax returns jointly. Notwithstanding this recommendation, the wife refused to do so.
The trial court ordered the wife to file joint income tax returns, but she refused and filed an appeal.
The Appellate Division, addressing this issue for the first time, concluded that New Jersey family courts have “discretionary authority” to force divorcing parties to file joint tax returns, but that the decision to do so must be based on the specific facts of each case. The Appellate Division provided further guidance by suggesting that “in general… trial courts should avoid compelling parties to execute joint tax returns because of the potential liabilities to which the parties would be exposed.” Id. at 398.
The danger of potential liability may be heightened in cases where there is an allegation by the resisting spouse of unreported income or other tax fraud by the spouse who seeks to compel the filing of joint returns. If there is legitimate concern about one of the parties having filed fraudulent tax returns in the past, this may be a compelling reason for the Court not to force an unwilling spouse to file joint income tax returns.
Another factor that a New Jersey family court may consider is whether or not there are enough marital assets to compensate a spouse for the loss of tax savings caused by the other spouse’s unwillingness to file jointly. If enough assets exist, the Court may decline to force a joint filing, and instead address the lost tax savings through equitable distribution.
Ultimately, the Court’s decision is heavily dependent upon the specific factual circumstances of each case, and if you find yourself confronted with a similar dilemma, there is no substitute for the advice of an experienced Divorce and Family Law attorney.
Salvaggio Law Group devotes its entire practice to New Jersey Divorce and Family Law matters. If you want to talk, please call me at (973) 455-1220 or fill out the Contact Form on my firm’s website.