'There's a line of crazy running through this conversation': Dave Ramsey urges caller not to join grandma's scheme to deceive IRS about $1 million debt

“Sarah, there’s just so much going on here that you’re not talking about or you don’t know,” Ramsey said in a clip posted July 12. “And it’s really, really scary. There’s a line of crazy running through this conversation.”

Here’s what was revealed during the exchange.

A questionable situation

Sarah’s mother-in-law currently lives with the couple in their rental home. However, Sarah says her grandmother-in-law has offered to buy her mother-in-law a house in Sarah and her husband’s names so her mother-in-law “is not docked by her unpaid debts from the IRS” — and the three would continue to live together in the new house.

“She has a lot of unpaid debts and so grandma is trying to take care of her by providing a home,” Sarah said.

Her mother-in-law, 55, is going through a divorce and lost her job in September after a corporate restructuring. Right now she’s making DoorDash deliveries to bring in some extra cash.

She’s also apparently nearly $1 million in debt.

When Ramsey asked why her mother-in-law had so much debt, Sarah responded: “I don't ask questions.”

Sarah says she adores her mother-in-law, but wants to know if this setup would be a wise decision and, if so, what they need to “have on paper.”

Why this is unethical

Ramsey answered clearly: “I would not do this.”

He said, by doing so, “you are tying yourself to people you don’t ask questions about, permanently, and you are taking away her reasons for getting back on her own feet. This is not good. It is not healthy.”

He said Sarah’s mother-in-law needs to recover from the grief that comes from ending a marriage and experience “what's known as a life — not hiding at her son’s house from reality.”

Secondly, “the whole reason to do this is to deceive,” he said.

“Your grandmother-in-law is teaming up with her daughter and using you guys to deceive the people that she owes,” Ramsey said. “This is deception and I’m not going to participate in that. It’s a lack of integrity. It’s unethical.”

Ramsey guessed the debt might belong to the mother-in-law’s ex-husband — perhaps unpaid IRS debt from a failed business venture. If so, it’s possible the mother-in-law had nothing to do with it, in which case she could potentially get rid of the debt using innocent spouse relief.