Innocent Spouse

If you are married, it is very likely that you will file a joint tax return to minimize your tax liability. However, by filing a joint return, you are agreeing to be held jointly and severally liable for any and all taxes, penalties, and interest due on the joint return. This is true even if a divorce decree or other agreement states that your spouse or former spouse will be responsible for the tax liabilities. However, there are provisions that may protect one spouse from the mistakes of another. If you find that the IRS is attempting to collect on a tax that was incurred jointly with a spouse or former spouse, you may qualify for one or more of the following types of relief:

Innocent spouse relief

This relief is similarly available if there is an understatement of tax or a deficiency on a tax return. The liability for the understated tax may be separated such that the requesting taxpayer is granted relief from the liability. In order to qualify for this relief, the requesting taxpayer must be divorced, legally separated, or living apart from the spouse or former spouse at all time during the 12 months prior to the filing of the request. Separation of liability applies only to amounts owed that are not paid, and the IRS will not refund amounts that have already been paid.

Separation of liability

This relief is similarly available if there is an understatement of tax or a deficiency on a tax return. The liability for the understated tax may be separated such that the requesting taxpayer is granted relief from the liability. In order to qualify for this relief, the requesting taxpayer must be divorced, legally separated, or living apart from the spouse or former spouse at all time during the 12 months prior to the filing of the request. Separation of liability applies only to amounts owed that are not paid, and the IRS will not refund amounts that have already been paid.

Equitable relief

If the taxpayer does not qualify for separation of liability or innocent spouse relief, equitable relief may be requested in which case the IRS may determine that the taxpayer should not be held liable for any understatement or underpayment of tax after taking into account all of the facts and circumstances. This type of relief is primarily requested when the requested taxpayer believed that the spouse or former spouse would pay the tax due on a joint tax return but failed to do so.

As part of their investigation, the IRS is required to contact the spouse or former spouse of the taxpayer that is requesting relief from liability. The IRS must allow the spouse or former spouse to provide information that may assist in determining the extent of relief from liability. However, the IRS will not provide information to the spouse or former spouse that could infringe on the privacy of the requesting taxpayer. If that taxpayer is a victim of domestic abuse and fears that filing a request for relief will result in retaliation, the IRS can be alerted to the sensitivity of the requesting taxpayer’s situation. While this does not result in special consideration, evidence of abuse is one factor that the IRS considers for certain types of relief.

For more information on the innocent spouse provisions, please call us for a free, confidential consultation. If you are searching for a highly qualified representative to negotiate relief from a liability incurred with a spouse or former spouse, we offer our services with the highest levels of quality and professionalism. Through our team of expert tax attorneys, enrolled agents, and CPA’s, we can help in resolving your back taxes and obtaining a fresh start towards financial freedom, whether you owe millions of dollars or only several thousand.