If we file joint returns for past years and the estate can’t pay the full tax bill, can the IRS come after me personally for the balance? – North Carolina

Short Answer

Yes. Signing a joint federal income tax return generally makes each spouse jointly responsible for the full tax, interest, and penalties on that return, even after divorce and even if one spouse later dies. If the decedent’s estate cannot pay, the IRS can try to collect the remaining balance from the surviving ex-spouse personally. In some situations, federal “innocent spouse” or related relief may reduce or eliminate that personal liability, but it is not automatic.

Understanding the Problem

In North Carolina probate, a common question is whether a former spouse can sign prior-year joint tax returns after the other former spouse has died, and what happens if the estate does not have enough money to pay what the return shows is owed. The decision point is whether filing “joint” for those past years creates personal responsibility for the unpaid balance if the estate cannot cover it. This issue often comes up when a marital settlement agreement required cooperation on filing, but the estate’s liquidity and the final tax bill are uncertain.

Apply the Law

Two different systems matter here: (1) federal tax law, which controls who is liable to the IRS on a joint return, and (2) North Carolina probate law, which controls how the estate pays valid debts and taxes from estate assets. A marital settlement agreement can create rights between former spouses (and sometimes a claim against the estate), but it usually does not limit what the IRS can collect from a person who signed a joint return.

Key Requirements

Joint return liability: If a joint return is filed, each spouse is typically responsible for the entire amount due on that return, not just “half.”
Estate payment is separate from IRS collection rights: The estate may be obligated to pay taxes as part of administration, but an estate shortfall does not automatically protect the surviving signer from IRS collection.
Possible federal relief: Depending on the facts, a surviving ex-spouse may be able to seek federal relief that can reduce or remove personal liability, but it requires a specific request and supporting proof.

What the Statutes Say

N.C. Gen. Stat. § 105-365 (Preference accorded taxes in liquidation of debtors’ estates) – In certain liquidation settings, taxes can receive priority treatment over many other claims, reflecting that taxes are often paid early from available assets.
N.C. Gen. Stat. § 1-22 (Death before limitation expires; action by or against personal representative) – Addresses timing rules when claims must be presented or pursued against a decedent’s personal representative, tying into the estate-claims process.

Analysis

Apply the Rule to the Facts: The facts describe a divorce with an agreement requiring cooperation on filing prior-year joint returns, followed by the former spouse’s death and concern about whether the estate can pay the resulting tax bill. If a joint return is filed for those past years, federal rules generally allow the IRS to pursue either signer for the full unpaid balance. Even if the estate is supposed to reimburse or pay under the divorce agreement, that usually creates a claim against the estate (or an enforcement issue), not a shield against IRS collection.

Process & Timing

Who files: Typically the surviving former spouse signs the joint return, and the decedent’s personal representative signs for the decedent when a joint return is being filed after death. Where: The return is filed with the IRS (and any required North Carolina return with the North Carolina Department of Revenue). What: The filing is the applicable prior-year Form 1040 marked as a joint return, with signatures handled according to IRS rules for deceased taxpayers. When: Timing depends on which tax years are being filed and whether extensions are available; deadlines can change and should be confirmed for each year.
Estate payment step: The personal representative gathers assets, identifies debts and taxes, and pays allowed claims in the required order before making distributions. If the estate lacks liquidity, the personal representative may need to prioritize required tax filings and consider payment arrangements or other options that apply to estates.
If the IRS seeks collection: If the IRS assesses a balance due on a joint return and the estate does not pay, the IRS may send notices and pursue collection against the surviving signer. If federal relief may apply, it is usually raised by filing the appropriate request with the IRS and providing documentation.

Exceptions & Pitfalls

Assuming the divorce agreement controls the IRS: A settlement agreement may support reimbursement or an estate claim, but it usually does not prevent IRS collection from a joint filer.
Signing without understanding the numbers: Filing jointly can be beneficial in some cases, but it can also attach personal responsibility for the full balance due. Reviewing the draft returns, supporting documents, and the source of the tax problem before signing is critical.
Missing relief opportunities: Federal relief may be available in limited situations (for example, where the tax problem relates to the other spouse’s income reporting or deductions), but it requires timely action and careful proof.
Probate cash-flow problems: Estates often face liquidity issues. A personal representative may need to plan for tax payments and avoid distributing assets too early if taxes are unresolved.

For additional background on how tax issues are commonly handled during an estate administration, see how estate taxes or IRS issues get handled during probate and what taxes have to be figured out and paid before the estate can distribute the remaining funds.

Conclusion

Under the rules that apply to joint federal income tax returns, signing a joint return for past years can make the surviving ex-spouse personally responsible for the full tax, interest, and penalties, even if the decedent’s estate cannot pay. North Carolina probate controls how the estate pays debts from estate assets, but an estate shortfall does not automatically stop IRS collection from a joint filer. The next step is to have the draft prior-year returns reviewed before signing and to coordinate with the personal representative on a payment plan or other approach before filing.

Talk to a Probate Attorney

If a former spouse’s estate needs prior-year joint returns filed and there is concern about an unpaid balance, our firm has experienced attorneys who can help explain the probate process, coordinate with the personal representative, and spot timeline issues that affect risk. Call us today at [919-341-7055].

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.