Feb 7, 2025
The IRS requires most Americans to file a tax return every year to ensure they're up to date on the amount of tax they owe. However, it's not like the Internal Revenue Service is going to come knocking on the door of late filers.
That being said, unfiled and unpaid taxes could eventually catch up to you one day. The IRS could garnish your wages if you owe back taxes and don't make any effort to pay, such as signing up for an installment agreement. They can also put a federal tax lien on assets you own, including your home.
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That's why it's best to stay current on your tax obligations. But let’s say your father, for example, has fallen behind on filing his tax returns and he now owes the IRS $200,000. Worse yet, what if there's now a lien on the house your mother paid for as a result of your father's poor handling of his taxes?
You may be inclined to want to help out as much as possible, but it's important to know how to navigate this very tricky situation.
When one spouse drops the ball on taxes
In the situation above, it's natural to want to help your mother, since she wasn't the one who messed up on their taxes. One thing you should know is that if your parents filed their taxes separately, your mother should not be on the hook for your father's underpaid taxes.
Remember, when taxes go unpaid for a long time, interest and penalties can accrue. But if your mom filed her own tax returns and paid the IRS every dollar she owed, then she shouldn't be in hot water with the agency.
Even if your parents filed joint tax returns, if your father underpaid those taxes, your mother may not be on the hook. Thanks to the IRS' Innocent Spouse Relief policy, one spouse won't necessarily have to pay additional taxes due to a mistake the other spouse made.
It's possible to file for innocent spouse relief as a joint tax filer if your taxes were understated due to mistakes on your return, or you didn't know about the errors. That said, if you're requesting innocent spouse relief, you must do so within two years of receiving an IRS bill or audit notice.
So in the situation above, whether your mom is eligible for relief depends on the timing of how things played out.
Another thing that could help in this situation is for your parents (individually or jointly) to consult a tax attorney. A tax attorney can help your father get current on his taxes via a repayment plan.
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An attorney can also try to make sure your mother isn’t harmed financially because of your father’s mistakes. You could also suggest that your parents hire a CPA or work with an enrolled agent to represent them in IRS negotiations.
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Should you get involved in your parents' financial mess?
It's pretty common for parents to help their adult children out financially. A 2024 Savings.com survey found that 47% of parents provide financial support to their grown children.
At the same time, 2024 Pew Research Center data found that 14% of parents received financial help from their children aged 18 to 34 in the past year.
If you're in a position to help your father deal with his IRS mess, it's certainly not a bad thing to offer that support. Just make sure you're not doing it to the detriment of your own finances.
However, a better way to help may be to set your parents up with the right professional who can help them navigate their situation. Remember, you may not be in the best position to dig through the numbers because you're emotionally involved. A professional, however, can handle the situation more objectively.
The other thing to understand is that even if you have the best of intentions, your parents may not react well to you getting too involved. A 2024 U.S. Bank survey found that parents would rather talk to their children about their choice of political candidates than finances. And baby boomer parents were particularly resistant to financial discussions.
So it may be in everyone’s best interest if you were to help out peripherally instead of being directly involved.
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Maurie Backman has been writing professionally for well over a decade. Since becoming a full-time writer, she's produced thousands of articles on topics ranging from Social Security to investing to real estate.
