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Court splits on first impression dissipation case

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An Indiana Court of Appeals judge dissented today from his colleagues' decision that a spouse may be found to have dissipated property after refusing to sign and file joint tax returns because the judge believes the ruling is "bad law and bad policy."

In Anna Mae Hardebeck v. James A. Hardebeck, No. 48A04-0904-CV-212, Judges Edward Najam and Michael Barnes adopted the holding that whether a spouse's failure to file a joint tax return constitutes dissipation under Indiana Code Section 31-15-7-5(4) must be determined from a review of the facts and circumstances in each case. The majority relied on caselaw from Pennsylvania and Tennessee since it was the first time the issue had been addressed in Indiana courts.

The dissolution court ruled Anna Mae Hardebeck dissipated marital assets when she refused to file a joint income tax return for 2006 and 2007 with her husband, James. That cost James more than $8,600 in state and federal income taxes. James filed for dissolution in 2008.

"As in any case involving an allegation of dissipation, the court should consider relevant factors including whether the expenditure benefited the marriage or was made for a purpose entirely unrelated to the marriage, the timing of the transaction, whether the expenditure was excessive or de minimis, and whether the dissipating party intended to hide, deplete, or divert the marital asset," wrote Judge Najam.

The majority noted Anna Mae never suggested she filed her tax returns separately to protect herself because James' returns were fraudulent, and she apparently refused to file their taxes jointly out of spite.

But Anna Mae was within her statutory rights in refusing to file a joint tax return, Judge James Kirsch wrote in his dissent, and she may have been acting with great prudence in doing so.

"I believe that requiring a spouse to execute a joint income tax return in such circumstances and to incur the joint and several liability that accompanies filing such a return, including any deficiencies resulting from it, any penalties assessed because of it and any additional tax liability subsequently imposed on it is bad law and bad policy," he wrote.

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  5. I have had an ongoing custody case for 6 yrs. I should have been the sole legal custodial parent but was a victim of a vindictive ex and the system biasedly supported him. He is an alcoholic and doesn't even have a license for two yrs now after his 2nd DUI. Fast frwd 6 yrs later my kids are suffering poor nutritional health, psychological issues, failing in school, have NO MD and the GAL could care less, DCS doesn't care. The child isn't getting his ADHD med he needs and will not succeed in life living this way. NO one will HELP our family.I tried for over 6 yrs. The judge called me an idiot for not knowing how to enter evidence and the last hearing was 8 mths ago. That in itself is unjust! The kids want to be with their Mother! They are being alienated from her and fed lies by their Father! I was hit in a car accident 3 yrs ago and am declared handicapped myself. Poor poor way to treat the indigent in Indiana!

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