The Nebraska Supreme Court recently decided that a Nebraska state court could order a couple to file joint tax returns for unfiled taxes in a divorce judgment. This has been a debated issue around the country because of the confusion over whether federal or state law governs. Generally, tax law is completely within the purview of federal law, but domestic relations are governed by state law. In Nebraska, the courts determined that state law wins out in determining whether a court can order a couple to file a joint return.
The states are fairly evenly split on this issue around the country. The courts here in Oregon have taken the opposite approach of the Nebraska courts. In 1986, the Oregon Court of Appeals decided a court could not order a couple to file a joint tax return. Matter of Marriage of Lewis, 81 Or. App. 22, 723 P.2d 1079 (1986). The Oregon court found that ordering a couple to file joint returns would violate Oregon statutes and the IRS Code. The Oregon court emphasized that the IRS Code allows for a couple to decide whether or not elect to file a joint return and a court order could not remove that right.
Tax issues can make a complex divorce even more complex. That’s why the attorneys at Gevurtz Menashe are trained to look at every last aspect of a divorce, including tax consequences. You want an attorney on your side that will explain every detail of the divorce to you and be with you for every step.