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If a friend uses my home address for his tax return, and he owes the IRS tons of money, will I be liable in any way?
Also normally would it be a problem if he filed a tax return with my address, and I filed a tax return with the same address in the same tax year?
If a friend uses my home address for his tax return, and he owes the IRS tons of money, will I be liable in any way?
Assuming that this is an income tax or sale tax return, rather than a property tax return, generally not.
The only case where you could be liable is where you were conspiring to help him evade tax collection somehow, or conspiring to evade state sales or income taxes.
For example, suppose that your friend had no connection to your home in your state (Nevada) with no income taxes and has never even set foot in your state, and actually lives in a state with high income taxes (California). But your friend is using your address to falsely claim residency in Nevada with your knowledge and cooperation to avoid paying California income taxes. To make it spicy, let's assume that your friend's state income tax liability would be $400,000 in California, but $0 in Nevada. In that case, you might have felony criminal liability under California's tax evasion statutes (for which you could be extradited to California) for conspiring with your friend to evade his California income tax liability.
But if you had no idea of what your friend was up to, and simply agreed to forward mail to him at your address (the way a typical mail drop company does), you would typically have no criminal or civil liability (subject to the "willful blindness" exception to lack of knowledge where you strongly suspect that your friend is up to no good but take a don't ask, don't tell approach).
Also normally would it be a problem if he filed a tax return with my address, and I filed a tax return with the same address in the same tax year?
No.
While concurring that the case asked is fine, if you take this to extremes it might not be. For example if you live in an office building in the Cayman Islands and have thousands of 'friends' who are all or mostly shell companies, you may be investigated by the US Congress.
Also, large numbers of refunds mailed to the same address -- large meaning hundreds or thousands, not two -- was, at least in the past, often associated with fraud. See https://www.treasury.gov/tigta/press/press_tigta-2015-16.htm (fourth paragraph). However, nowadays both legitimate filers and fraudsters have mostly switched to electronic payment of refunds (direct deposit) which is associated only with a bank/FI account not a physical address, and the Q did not suggest any sharing of a bank account, as well as describing a situation with no refund in the first place.
If you are doing anything shady, you might be more likely to be caught if your friend uses your address. If your friend is investigated, it is likely that whoever is investigating your friend would become aware that you are at the same address. Any reasonable investigator would also likely look into things associated to your address. Even though you probably would not be a primary target of an investigation, if anyone investigating your friend came across activity that seemed suspicious related to that address, they might investigate it. And then they might later tie that activity to you instead of him, but once they are investigating it, they might continue to do so.
In the 1980s I knew a married couple who lived together with two children but used Grandma's address for the wife's tax return and their real address for the husband's. They filed taxes separately, each as "head of household", each claiming one child as a dependent. Their taxes were lower that way than by filing married / joint. They both had about the same income and there was a so-called marriage penalty built into the federal tax rates at the time. I don't know if this kind of scam would still work today. (Don't try this at home!)
This clearly was tax fraud by the couple, but Grandma wouldn't have had any liability unless the couple got caught and Grandma lied to the IRS about who lives where.
