Tax Fraud and Innocent Spouses

On October 10, 2012, in Divorce, Family Law, by Jason Mays, Esq.

Innocent Spouse Doctrine

Tax Fraud and Innocent Spouses

Generally, when spouses file tax returns jointly, each spouse is liable for any understatement on the jointly filed return.  This means that, for example, a husband will be held liable if his wife understates her income, and vice-versa.  In a sense, this places a burden on each spouse to ensure that the other spouse’s income is reported correctly.

But what if one spouse hides income from the other?  Individuals that can convince a court that they did not know of their spouse’s unreported income when they filed the return may be considered “innocent.”  Innocent spouses will not be prosecuted by the taxing authority.  But if the innocent spouse benefits from the unreported income, that spouse still may have to contribute to the tax debt.  Additionally, in a divorce action, a matrimonial court may distribute liability for the debt between the spouses without regard to the innocent spouse rule.

Long Island Divorce Attorneys

If you have any questions about Family Law, Divorce, or other legal issues, the attorneys at the Law Firm of Vaughn, Weber & Prakope, PLLC can help.  Call our office at 516-858-2620 today.

Divorce Mediation

Mediation can be an affordable alternative to traditional divorce.  The main difference between mediated and traditional divorce lies in the fact that, in mediation, one neutral mediator negotiates an agreement between the spouses.  In traditional divorce, each spouse hires an attorney.  The attorneys represent the interests of their own clients, often taking an adversarial approach to the division of marital resources.  Both paths to divorce result in a legally enforceable agreement.  Spouses must determine for themselves which approach is more appropriate for them, based on their relationship and circumstances.

If a separation is contentious, and the spouses have genuine disputes about the division of assets, the adversarial approach may be the only way finalize the divorce.  But not all divorces need to be contentious.  If spouses can remain civil with one another, mediation can provide a quicker, cheaper alternative to the traditional two-attorney adversarial process.

First, since in mediation the spouses split the cost of one professional, rather than each hiring their own, the cost of the divorce can be dramatically reduced.  Legal fees can easily cost tens of thousands of dollars in a traditional divorce, and can increase if the divorce drags on over time.  Mediators can typically offer a flat rate, comparable to what one attorney would charge for an average divorce.

Second, mediation can be much quicker than a traditional divorce.  As soon as the mediator memorializes the parties’ agreement and files the necessary court papers, the divorce is essentially complete.  The process, then, only needs to last as long as it takes the parties to come to an agreement.  In traditional divorce, the process depends upon court appearances, adjournments, and other administrative delays.  For couples that want finality quickly, mediation might be the way to go.

In addition to these advantages, mediated divorce can be much less stressful than a drawn out battle.  This can be especially advantageous for families.  Understandably, many couples are as concerned with the effect their divorce will have on their children as they are with the effect it will on themselves.  For spouses that can work with each other, mediated divorce can avoid adding unnecessary stress to an already difficult time in a child’s life.

Mediation is not for everyone.  Where real differences exists, mediation will not likely work.  But where couples can put their differences aside for the sake of a speedy and peaceful resolution, mediation might be the best way to separate.

If you would like to explore the option of mediated divorce, call the Law Firm of Vaughn, Weber & Prakope, PLLC at 516-858-2620 today.  We have experience in divorce and family law, and offer free consultations.  We are located in the heart of Nassau County at 393 Jericho Turnpike, Suite 208, Mineola, NY 11501.

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Divorce and Separate Property: What you get to keep!

On May 25, 2012, in Divorce, by John A. Weber IV, ESQ.

Separate Property in Divorce

Not ALL Property is Divided between Spouses in a Divorce: Separate Property Remains with the Spouse.

When a couple divorces, the couple’s marital property is subject to equitable distribution. This means the property is divided between spouses according to certain legal principles. But not all of a spouse’s property is considered “marital property.” Some assets may be considered “separate property.” Separate property is not subject to equitable distribution, and therefore may remain with one spouse after a divorce.

The terms “marital property” and “separate property” are defined by New York’s Domestic Relations Law:

The term “marital property” shall mean all property acquired by either or both spouses during the marriage and before the execution of a separation agreement or the commencement of a matrimonial action, regardless of the form in which title is held, except as otherwise provided in agreement pursuant to subdivision three of this part. Marital property shall not include separate property as hereinafter defined.

The term separate property shall mean:

(1) property acquired before marriage or property acquired by bequest, devise, or descent, or gift from a party other than the spouse;

(2) compensation for personal injuries;

(3) property acquired in exchange for or the increase in value of separate property, except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse;

(4) property described as separate property by written agreement of the parties pursuant to subdivision three of this part.

As a general rule, it appears that property obtained prior to a marriage, or through non-marital sources, remains separate, whereas property that is acquired during the marriage is marital property, subject to equitable distribution. But as with most areas of the law, there are exceptions. If a spouse “co-mingles” property that would otherwise be considered “separate” with “marital property,” it may be deemed marital property subject to equitable distribution. On the other hand, property that is acquired in exchange for “separate property” may be deemed “separate,” even if acquired during the marriage. Property acquired after a separation agreement or divorce proceeding is generally considered separate. Finally, prenuptial or separation agreements in which spouses agree to treat separate property as marital property are generally enforceable.

If you have questions about this or other legal matters, the Law Firm of Vaughn, Weber & Prakope, PLLC would like to assist you. Please call (516) 858-2620 to set up a free consultation with an experienced matrimonial attorney.

Divorce and Carrying Costs

On May 4, 2012, in Divorce, Family Law, by John A. Weber IV, ESQ.

What are “Carrying Costs” in Divorce Cases?

In the context of divorce, the term “carrying cost” refers to the expense of maintaining marital property, such as real estate, until the property is disposed of according to the terms of a divorce agreement or court order. Real estate carrying costs may include property taxes, insurance, or utilities, among other things. Typically, if marital property is to be sold, with the proceeds of the sale to be distributed equally between between the spouses, the property’s carrying costs – the costs of maintaining the property until the sale – is also allocated equally between the spouses. New York courts have declined to order a spouse to pay one-half of all carrying costs on marital property where that spouse was financially unable to make the payments. However, where one spouse has paid the other spouse’s carrying costs, a court may credit those payments to the paying spouse’s maintenance obligations. Courts have the power to allocate carrying costs differently as circumstances require.

If you have any questions about maintenance payments, carrying costs, divorce, or other matrimonial or family law issues, The Law Firm of Vaughn and Weber is here to help. Call (516) 858-2620 to speak with a Family Lawyer and Divorce Attorney today!

*Contributions to the research and preparation of this blog were made by Jason Mays, J.D. (awaiting admission in NYS).

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