Innocent Spouse Tax Relief

The US Tax Code has many benefits to married couples when it comes to filing taxes to the IRS. However, just because a couple is married it does not always mean both parties are always held responsible when it comes to the IRS. Generally speaking when a couple files a joint tax return each person is equally responsible for any amount of tax that is owed.

However, the IRS makes certain concessions when it comes to spouses in the case where one spouse lied about some information on the return. This is known as an innocent spouse tax relief and it allows the individual that could be held liable despite not knowing about lying. If your spouse ended up lying about their income or knowing underpaid taxes without your knowledge.  If this happens you have the right to apply for Innocent Spouse Tax Relief.

Call us for a free and confidential evaluation at 1-888-498-2937.

What is Innocent Spouse Relief?

The IRS has a provision in the code that allows it to grant an exemption to an individual that filed a joint tax return with their spouse and signed the return only to find out from the IRS that their spouse fraudulently underreported their income or incorrectly stated tax payments. At the time that they signed the return, they had no idea that their spouse lied or had any expectation of knowing when they signed the return.

If it is determined that you should be exempted, the IRS will calculate what part of the tax bill that you are doing going to be held accountable for. Since you cannot be held liable for the income and therefore you cannot be held liable for the interest or penalties either. But, if they further determine that there are still outstanding collectible taxes you and your former spouse can be required to pay the debt still.

What are the qualifications to be granted the Innocent Spouse Tax Relief?

The IRC spells out exactly what all of the qualifications are that an individual needs to meet in order to qualify to be granted Innocent Spouse Relief. Just like most situations you should have look into finding a good tax defense company that specializes in helping taxpayers who have feel that they are wrongly being expected to be held accountable for the bad actions of the other person.

The following are specific qualifications you must meet to be able to granted Innocent Spouse Tax Relief

#1 Filed a joint tax return

#2 Spouse or former spouse in fact fraudulently report their income on your joint return

#3 You signed the return without knowledge of the fraud being committed by your spouse

#4 Under those conditions, it would be unfair to you to be expected to pay for unreported income

Additional types of Spousal Relief that can be granted

The IRS established qualifications for the Innocent Spouse Tax Relief, but what happens to those individuals that do not meet those qualifications, but still have grounds to at least to be considered for exemption from the wrongdoing of their spouse. For people who believe they still should be granted some sort of relief the IRS does have two other types of relief that could possibly fit you; Relief by Separation of Liability and Equitable Relief.

Relief by Separation of Liability

This request is designed to be used in the event that you were divorced, separated or widowed and have not lived with the person at 12 months before you make the application for the exemption. This will not likely absolve you completely of any liability, but the IRS will determine what percentage of reduction you should be granted based on your application. This decision will also apply to any interests and penalties that may have been imposed on you.

Equitable Relief

The Equitable Relief provision of the IRC Code 6015 allows a person to be able to get relief even they did not qualify for the traditional Innocent Spouse Tax Relief for any number of reasons. The IRS can grant this type of relief even if the spouse did know that a fraud was committed, but was forced to sign the return under extreme duress.

Injured Spouse Allocation

There is another way that a spouse can be adversely affected by the actions of their spouse. When a couple files a joint tax return they are equally entitled to the funds that result from the return. However, if one of the individuals owes the IRS for back taxes, penalties, and interest the IRS can decide to take those funds out of the refund amount.

For the person who did not actually owe the money, it would not be fair that they would have money that they are owed from joint tax return be taken away from them. That is where the form 8379 Injured Spouse Allocation. By filling out the form and filing it you could be awarded the part of the money that you should have received based on your joint return.

Call us for a free and confidential evaluation at 1-888-498-2937.