Widow responsible for husband's embezzlement?

[zemri]

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Any help appreciated.

My father in law embezzled approx $20,000 from his church in 2009, and subsequently committed suicide and disclosed the embezzlement in his final letter.
my mother in law had absolutely no knowledge of his actions and was left in a mountain of debt that he had managed to keep secret from her. no one knows what this 20,000 was spent on, as it was largely taken out in cash.
She has received a 1099 from the church for the amount of missing money on the books as misc income. She can't afford to pay the taxes on this as I mentioned she is not only penniless but in debt.

My Question: Is she personally responsible for her husband's embezzlement to pay the taxes on it? OR is there some other way the church can account for this loss without penalizing her who was guilty of no wrong doing?
Thanks for any insights.

[Skyhawk]

Did the church issue the 1099 in her name and SSN or in His? NO, she is NOT responsible for his crime, nor the tax. She can file a return as Married Filing Seperate and would only include her income and her expenses. This avoids jopint and severable liability that comes with a joint return. She could also file as Married Filing Joint and file an injuried spouse form so that she is not held responsible for his "income". There is a more difficult process and that is the "Innocent Spouse" provision in the tax law. She cannot be held "jointly and severably liable" for his income for tax purposes. Generally she cannot be held responsible for his criminal activity. If the 1099 was issued in her name she should see an attorney ASAP.

[zemri]

thanks for those insights skyhawk...
one more thing...
Can then the tax that he owes if it is separate then be assessed to joint property as a lien or something. Ex. they own a house in both of their names.

[Skyhawk]

Yes the government can collect the taxes owed by going after jointly owned property. You should discuss this with an attorney. Do NOT take any actions as an executor of the estate until you see an attorney. Yoou should also raise questions as to the accuracy of the $20,000 figure and the "burden of proof" as well as other legal issues. SEE an ATTORNEY.