If Louisiana spouses are jointly liable for federal taxes because they filed a joint tax return, the IRS may collect taxes from either spouse’s separate property and from any of their community property.1

In some cases, only one spouse may owe the tax liability. This situation may arise when one spouse incurred a pre-marital tax debt, the spouses did not file a tax return, the spouses filed separate returns, one spouse qualified for innocent spouse relief, or one spouse incurs self-employment tax liability.

The IRS may collect a liable spouse’s pre-marital tax debt from all of the liable spouse’s separate property. Because Louisiana is a 100% community property state for tax collection purposes, the IRS can collect a liable spouse’s pre-marital or post-marital tax debt from 100% of the community property.2  Currently, a spouse’s wages, even if the spouses are separated, are community property in Louisiana and may be levied by the IRS to collect a federal tax debt. However, a levy against a non-liable spouse’s wage is not a “continuous levy” under I.R.C. § 6331(e), and so, a separate levy must be issued for each paycheck. A non-liable spouse may also claim the exemptions for levied wages.3

Jointly owned property can be seized by the IRS. However, the IRS must compensate the nondebtor for the value of the nondebtor’s share of the community asset being seized.4  District courts have some discretion under I.R.C. § 7403 to refuse to order a foreclosure sale if the IRS holds a lien on only part of the house.5

• 1I.R.M. 25.18.4.1.
• 2Rev. Rul. 2004-72, I.R.B. 2004-30; I.R.M. 25.18.4.6. In states that are “50% community property” states, the IRS may be limited to collection against 50% of the community property.
• 3I.R.M. 25.18.4.3.
• 4United States v. Rodgers, 461 U.S. 677, 699 (1983); I.R.M. § 25.18.4.1.
• 5Rodgers, 461 U.S. 677; United States v. Jensen, 785 F. Supp. 922 (D. Utah 1992) (harm to terminally ill nondebtor outweighed delay to IRS); United States v. Jones, 877 F. Supp. 907 (D.N.J. 1995) (nondebtor wife kept house in return for paying one-half of the imputed rental value of the property to IRS).

Under I.R.C. § 6402, the IRS may offset tax refunds to satisfy certain unpaid debts. Thus, a taxpayer’s tax refund may be seized to pay delinquent child support obligations, state taxes, or past due federal debts. Federal debts can include Social Security overpayments, past due Small Business Administration loans, or past due federally insured education loans. Typically, the IRS seizes part or all of the tax refund to pay the qualified creditor that invoked the § 6402 offset procedures.

In Louisiana, the IRS may seize or offset 100% of the spouses’ tax refund to collect one spouse’s unpaid federal tax debt.1  However, the rights of other creditors to an offset of a non-liable spouse’s tax refunds are more limited. These creditors may not offset against the non-liable spouse’s share of community property.2  However, if a state tax refund is community property, the State of Louisiana may offset the refund to satisfy one spouse’s separate debt.3

If a joint return was filed and both spouses had income and tax payments on the return, the non-liable spouse may request the portion of the tax refund attributable to that spouse by filing a Form 8379. For example, if the non-liable spouse worked and had income taxes withheld from the paycheck, that spouse is permitted to obtain the portion of the refund attributable to the withheld payments. This form should be filed along with the Form 1040 but can also be submitted later.

Louisiana residents may apply for injured spouse relief if they were not required to pay the past due amount that was offset by the IRS at the request of a qualified creditor. Overpayments are allocated according to state law.

• 1See Rev. Rul. 2004-72, I.R.B. 2004-30.
• 2I.R.M. 25.18.5.8.
• 3La. C.C. art. 2345 (a spouse’s separate obligation may be satisfied from community property during the community); Price v. Secretary, 95-887 (La. App. 3 Cir. 12/6/95), 664 So. 2d 802 (wife’s wages garnished to satisfy husband’s separate tax obligation). In Louisiana, child support that accrues during a second marriage is a community obligation. Gill v. Gill, 39,406-CA (La. App. 2 Cir. 3/9/05), 895 So. 2d 807. The State of Louisiana will offset a community tax refund to collect child support owed by one spouse for children of a prior marriage, whether it accrues during the second marriage or is for arrearages that pre-date the second marriage.