It is well settled that trial courts have discretionary authority to compel parties in divorce proceedings to file joint income tax returns. However, the marital relationship can have implications with respect to other types of tax returns, such as estate and gift tax returns. While many state courts, including New Jersey courts, have addressed the filing of income tax returns in divorce situations, similar authority does not exist with respect to the filing of gift tax returns.
In Bursztyn v. Bursztyn, 379 N.J. Super. 385 (App. Div. 2005), the court held that the trial courts have discretionary authority to compel parties in divorce proceedings to file joint income tax returns. Whether to do so in a given case will depend on the facts. Moreover, trial courts should avoid ordering the parties to execute joint income tax returns because of: (i) the potential liability to which either party could be exposed; and (ii) the ability to compensate a party for the adverse tax consequences resulting from the insistence of one party on filing separately.
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