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Helplessness Can be Overcome
May 24 2011 05:50 PM | Eva Rosenberg  in Protecting Your Family -----
A recent question to TaxMama was very disturbing. It was particularly disturbing because I know how commonly this kind of thing happens. So do you.

After a bad marriage, undoubtedly full of bullying and anger, the couple gets divorced. The court orders the pension plan to split or awarded to the wife. He steals it or spends it. He files a tax return early, forges her name or PIN (on an electronic return) and steals the refund. Or leaves her stuck for HIS big tax bill without her knowledge or consent. He doesn’t bother to pay child support or alimony, except where it’s convenient. Or he hides his assets in someone else’s name.

In one case, I heard of a guy who owned a car dealership and advertised regularly on television, with himself right there on camera. He had put the dealership in his girlfriend’s name – and told IRS he didn’t have any assets or income to pay his tax bill. So they took the tax debt he had caused, from her meager paycheck.

So, I would like to address two things today.

1. The utter helplessness that happens in any nasty divorce – especially when there was an abusive relationship.

2. The need for speed when it comes to tax and legal issues.

Helplessness – Even in friendly divorces (like mine, in my early 20s), you just want to get it over with. You’ll do anything you can, give up anything you must, just to end it. Or you turn into an angry monster trying to get everything you can, to punish him or her, whether you’re entitled to it or not.

Both those paths are wrong. The most important thing you need during a divorce is a good, positive, well-adjusted friend who can help you maintain perspective – and fairness. You need a friend who will help you insist on looking after your (and your children’s) long-term welfare, by being assertive, not aggressive.

If you don’t have positive friends or family members to help you…well, that may just be why you ended up in a bad relationship in the first place. You can’t choose your family. But, perhaps it’s time to assess how you choose your friends? People who make you feel badly about yourself are people to avoid. Friends are people who cheer for you, make you feel good, and see the positive side of your experiences and stories – not always what you’ve done wrong. Being surrounded by good friends, you’ll never get into a bad marriage, again, either.

Speed – When it comes to tax and financial crimes, the issues are serious and require immediate action. Things like tax refund theft and 401(k) theft – could have been avoided or corrected by acting swiftly.

During divorce proceedings, as soon as you get a court order entitling you to the right to assets (especially pension plans), notify the asset holder immediately about the court order. In an abusive divorce situation, ask your attorney to have the court issue an order to freeze key assets until their dispensation is determined. This is rarely done. I don’t know why; since it is very common for spouses to steal or hide assets.

When something like tax returns are forged – you can correct the problem by notifying IRS immediately. And by filing your own, correct tax return – even if it must be a married, filing separately tax return. That way, you may still be able to get your share of the refund – or avoid being held responsible for your ex’s balances due.

There is always a statute of limitations (a time limit) to correct or undo tax and legal issues. By acting quickly, you can fix the problem. Waiting until you get over your grief, fears, or stresses – it becomes too late to recover your losses and fix the problems.

Eva Rosenberg, EA is the publisher of TaxMama.com , where your tax questions are answered. Eva is the author of several books and ebooks, including Small Business Taxes Made Easy. Eva teaches a tax pro course at IRSExams.com and other tax courses at http://www.cpelink.com/teamtaxmama.





1 Comments

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Sabrina O’Malone 

24 May 2011 - 03:43 PM
Great article and great advice, Eva. It is all too common.
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