Common Law Marriage

[Peachie]

I just watched an episode of Judge Judy in which a couple said they have lived together for a number of years and considered themselves married and filed joint tax returns together. She said they could not do it and proceeded to call her accountant who agreed with her. Said they needed to file amended returns and send the money back and get what they're entitled to. I thought I would die laughing. Now, I did not hear, nor did I see what state the couple was from so maybe, she has more info than me. In fact, I am sure of it. My question: Doesn't IRS reccognize common law marriage if you live in a state that does?

She just seemed hell bent on being correct. Again, the only way I would agree with her is if the couple were from a state that doesn't honor CLM. Comments, please. Thanks.

Peachie

[WhiteOleander]

Yes, the IRS will recognize MFJ if the couple lives in a state that recognizes common law marriage.
I am in Texas and common law marrigae is allowed here. I always caution my clients that if they file MFJ, the IRS says they will require them to get an actual divorce if it doesn't work out. They cannot just go their separate ways. Now, admittedly, I have never actually seen the IRS do this.

PS. I saw that same episode. I said I need to retire and go to work for all these judges. They never know the tax laws. I could be on call via webcam

[Peachie]

Yes, the IRS will recognize MFJ if the couple lives in a state that recognizes common law marriage.
I am in Texas and common law marrigae is allowed here. I always caution my clients that if they file MFJ, the IRS says they will require them to get an actual divorce if it doesn't work out. They cannot just go their separate ways. Now, admittedly, I have never actually seen the IRS do this.

PS. I saw that same episode. I said I need to retire and go to work for all these judges. They never know the tax laws. I could be on call via webcam

Wasn't she amazing on there? I also liked how she said, "My accountant is very smart". I thought, well, he might be smart but not necessarily right.

Thank you.

Peachie

[Edward]

Common Law Marriage

Go to: http://www.ncsl.org/default.aspx?tabid=4265 This lays out the whole thing on this subject. One interesting point is where they point out that "There is no such thing as common-law divorce. Once parties are married, regardless of the manner in which their marriage is contracted, they can only be divorced by a court order". Have you found out what state the couple were from? Would be interesting to find out.

[solomon]

[QUOTE=Edward;107955Once parties are married, regardless of the manner in which their marriage is contracted, they can only be divorced by a court order"..[/QUOTE]

Not so in Texas. In this state they are called Informal Marriages - not Common Law - and if the parties go their separate ways and do not file a suit within two years, it means that there was never a marriage in the first place. See 2.401(b) of Texas Family Code.

[solomon]

the IRS says they will require them to get an actual divorce if it doesn't work out. They cannot just go their separate ways.

I would appreciate if you would advise us of the Code or Regulation regarding the IRS requiring an actual court divorce. Seems this would be important to know.

Regarding going their separate ways, actually they can. See Texas Family Code 2.401(b). I believe the IRS recognizes state law in this matter.

[BOB W]

Interesting issues........What happens to Marital Assets, or is there no such thing covered under this type of relationship?

ADDED: I found my answer here: http://texfamlaw.blogspot.com/2009_04_01_archive.html

[solomon]

Interesting issues........What happens to Marital Assets, or is there no such thing covered under this type of relationship?

This is one reason why in Texas one party will file suit within the two year time frame if they go separate ways. Of course, here to be married a couple just has to hold themselves out to be married - assuming they did not make a declaration to a clerk of the court. Even if they did make such declaration, it is still an informal marriage.

Back to just holding themselves out to be married and do things like most ceremonially married do like joint checking, file joint tax return etc.

In one case of which I am aware, the couple lived together and the male would not agree to hold themselves out to be married. Subsequently, he tired of the relationship and went his way. She filed suit and the Court ruled in her favor. The reason? He had put the girl on his insurance at his employment and to do so he had to indicate on the form that the girl was his wife. That in of itself did him in - the Court said they were married and the community property rules reigned.

[Gary2]

Not so in Texas. In this state they are called Informal Marriages - not Common Law - and if the parties go their separate ways and do not file a suit within two years, it means that there was never a marriage in the first place. See 2.401(b) of Texas Family Code.

I think you're misinterpreting that. The blog cited by Bob W. indicates why, at http://texfamlaw.blogspot.com/2009/0...ut-common.html .

One problem with common law marriage is that there may be no paper trail. If there's a question of whether or not a common law marriage exists, it turns into "he said, she said." As with any question of fact, the court will decide based on the testimony and other evidence that it has. Since the evidence is likely to not be overwhelming one way or the other, there's also a question of burden of proof.

Not being a lawyer, I can't say where the burden of proof would fall in general in these cases in Texas. But all 2.401(b) of the Texas Family Code does is to establish the burden of proof in one particular set of circumstances. What it says is that if there have been no proceedings after two years of separation, there is a rebuttable presumption that the marriage never existed. That doesn't mean the marriage is dissolved or annulled, it just means that if and when a court has to decide, the burden of proof is on the party claiming that there was a marriage to rebut the presumption that the marriage didn't exist. If, for example, you have ten years worth of MFJ federal tax returns signed by both parties, that's probably a good start on that proof. Indeed, I wonder if a mere public statement of the form "I figured we could just divorce by living apart for two years" would be taken as evidence that the marriage actually existed - and hence the living apart would not result in an annulment.

Furthermore, even when you could rely on this provision, it's still not the same as divorce, particularly for tax purposes. If applicable, it would be comparable to an annulment. Thus, if you had been filing as MFJ, you'd have to go back and amend them to be single or HoH. (Yes, changing MFJ to single or HoH is allowed, and in this case, required.)

I'm not a lawyer, and I don't live in Texas, but I just don't see any way of reading that law as saying that if you've been filing MFJ for years, all you have to do is live apart for two years and then you can file as single.

[Peachie]

I looked at the episode

Go to: http://www.ncsl.org/default.aspx?tabid=4265 This lays out the whole thing on this subject. One interesting point is where they point out that "There is no such thing as common-law divorce. Once parties are married, regardless of the manner in which their marriage is contracted, they can only be divorced by a court order". Have you found out what state the couple were from? Would be interesting to find out.

again to try to see if the state was shown and nothing was revealed. I would give anything to know the state. I am thinking she already knew CLM was not recognized where they came from. However, what got to me is how blanket her statement was. Until several years ago, Georia reognized CLM, so her statement would have been incorrect in relation to Georgia, especially if CLM was grandfathered in.

[Peachie]

Makes sense to me.

This is one reason why in Texas one party will file suit within the two year time frame if they go separate ways. Of course, here to be married a couple just has to hold themselves out to be married - assuming they did not make a declaration to a clerk of the court. Even if they did make such declaration, it is still an informal marriage.

Back to just holding themselves out to be married and do things like most ceremonially married do like joint checking, file joint tax return etc.

In one case of which I am aware, the couple lived together and the male would not agree to hold themselves out to be married. Subsequently, he tired of the relationship and went his way. She filed suit and the Court ruled in her favor. The reason? He had put the girl on his insurance at his employment and to do so he had to indicate on the form that the girl was his wife. That in of itself did him in - the Court said they were married and the community property rules reigned.

If you've been filing tax returns and claiming to be married, I can see why you would need to get a divorce in state that recognizes CLM. I think the one part Judge Judy had that I didn't was the state the couple lived in.

I am enjoying the different comments that I have given little thought.

Peachie

[gkaiseril]

Wasn't she amazing on there? I also liked how she said, "My accountant is very smart". I thought, well, he might be smart but not necessarily right.

Thank you.

Peachie

She is acting as an arbitrator and not a judge.

As noted elsewhere, in some states it is possible to have a informal marriage annulled and the tax treatment for an annulled marriage is different than a divorce. If a marriage is annulled, then legally it is as a marriage never existed for most matters an for open tax years the parties may need to amend their returns to the single or head of household filing status.

From IRS Publication 501:

State law governs whether you are married or legally separated under a divorce or separate maintenance decree.

Divorced persons. If you are divorced under a final decree by the last day of the year, you are considered unmarried for the whole year.

Divorce and remarriage. If you obtain a divorce in one year for the sole purpose of filing tax returns as unmarried individuals, and at the time of divorce you intended to and did remarry each other in the next tax year, you and your spouse must file as married individuals.

Annulled marriages. If you obtain a court decree of annulment, which holds that no valid marriage ever existed, you are considered unmarried even if you filed joint returns for earlier years. You must file amended returns (Form 1040X) claiming single or head of household status for all tax years affected by the annulment that are not closed by the statute of limitations for filing a tax return. The statute of limitations generally does not end until 3 years after your original return was filed.

[Davc]

Once you're common law married you need a divorce to sever the tie regardless of where you're living at the time.