Here’s the scoop.

Your husband took money out of a retirement plan. He confused the withholding with a tax bill and didn’t list the income on his tax return. The IRS caught it about a year later and billed him. He didn’t pay it and then when you filed for 2008, the IRS intercepted the refund.

He also failed to realize that if he had to list the money on the 1040, he had to list it on the state as well. The state caught the error after the IRS did.

As for who owes, yes, the IRS and the state *could* have taken the money from the ex-spouse. She could also file an Innocent spouse form and ask to be taken off the debt because it wasn’t her retirement income that caused the problem. (This isn’t always done, though.) Both tax entities tend to take the money from whomever they can find first.The state may not actually know what caused the adjustment. Many states start with the federal taxable income.

Both spouses are responsible until the entire debt is paid. The IRS and state will collect from whomever is easiest to collect from until the entire debt is paid off.If you filed joint with him any year since you’ve been married, they can and will take ALL of the refund, his and yours, for that year if he owes back taxes, unless you file an injured spouse form.

If he filed joint with his ex in 2005 and that’s when the problem was, the IRS will go after each of them for the money and will take it wherever they can get it. No, each of them isn’t responsible for half of it. They’re each responsible individually for ALL of it until it’s paid off.

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