Caught in Your Ex-Spouse's Tax Liability? Apply for Innocent Spouse Relief
Most married couples file joint income tax returns. Filing jointly means that both spouses are held liable for any taxes, interest, and penalties--including those resulting from mistakes or deliberate non-compliance in taxation. If within three years, the IRS determines that taxes were not filed correctly, the IRS may go after both spouses in an attempt to collect what is owed. If one spouse made all the financial decisions, including filing and paying the taxes, both spouses can face collection action from the IRS. This is the case even if they are now separated or divorced and the other spouse knew nothing of the intentional or unintentional errors in filing or paying taxes.
To this end, the IRS instituted a policy referred to as Innocent Spouse Relief, which provides relief from taxes, penalties, and interest owed by an ex-spouse. In 2012, the IRS expanded the availability of Innocent Spouse Relief, making it easier than ever before to obtain such relief. If you believe you qualify for Innocent Spouse Relief, tax attorney and CPA Jo Ann M. Koontz can analyze your situation and help you to obtain relief.
There are three types of innocent spouse relief with different qualifications for each one.
- Original Spouse Relief – This is the first and most basic form of relief. In order to qualify, you must have a jointly filed tax return with your spouse on which your spouse made serious mistakes or committed fraud. You must not have been aware of the fraud, and you must be able to prove that you did not know and had no way to know.
- Separate Liability Election – This type of relief divides the amount owed between you and your former spouse. In order to qualify, you must have filed a joint tax return with a spouse to whom you are no longer married or from whom you are separated. Alternatively, you may qualify for separate liability election if you were not a member of the same household when you filed the joint tax return.
- Equitable Relief – If you do not qualify for either of the other two forms of Innocent Spouse Relief, the IRS will examine your eligibility for equitable relief. This is the only type of innocent spouse relief that allows you to obtain relief from underpayment or understatement of tax. You may qualify for equitable relief in situations when you were the victim of abuse, when you were unaware of your spouse’s fraudulent actions, or when circumstances denied your ability to pay the tax.
- Bringing Taxpayers into Compliance
- Child Deductions and Dependent Deductions
- Currently Not Collectible Status
- Offer in Compromise IRS Payment
- Paying the IRS with an Installment Agreement
- Penalty Abatement May Reduce or Eliminate IRS Debt
- Responding to an IRS Notice
- Tax Lien and Lien Releases
- Unfiled Tax Returns
- Wage Garnishment and Tax Levy