Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 170.0007.100


170.0007.100 Earning Withholding—Taxpayer's Spouse. A taxpayer is indebted to the Board for an amount which was determined by audit conducted on one account on December 14, 1992, and conducted on another account on September 17, 1993. The taxpayer is married to a television personality who has substantial earnings as well as property. The taxpayer and his wife entered into a prenuptial agreement on December 31, 1990. That agreement was acknowledged and incorporated into a marital agreement which they entered into on November 30, 1992. The agreement provided that neither spouse had or would obtain any interest in the other's property and that all property acquired by either spouse during the course of the marriage would be that spouse's separate property.

The Universal Prenuptial Agreement Act, Family Code section 16000 et seq., allows individuals who are entering, or intend to enter into, marriage to make a determination of the status of their property before, during, or after the course of a marriage. The agreements entered into by the taxpayer and the spouse satisfy the requirements of the Act. Civil Code section 3439.05 provides that a transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before transfer was made or the obligation incurred. The tax obligation was incurred by the taxpayer subsequent to the execution of the premarital and marital agreement. Hence, even assuming there was a transfer involved, that transfer could not be fraudulent as to the Board as a creditor of the taxpayer. Therefore, the Board cannot seek to reach the earnings of the taxpayer's spouse because there was no transfer of property at the time the parties entered into the premarital agreement and because the debt to the Board arose after the agreement was executed. 8/31/95. (Am. M99–1).