Obtain Relief from a Spouse’s Tax Debt
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 relief.
This program is designed for people who filed a joint return that later had a balance due because of errors on the tax return. If you are granted relief through the Innocent Spouse claim, your entire debt will go away and only your spouse or former spouse will be liable. The IRS’ goal is to provide relief to the spouse who was unaware or not at fault for the creation of a tax liability, hence the IRS rules that it would be inequitable to hold the innocent spouse liable for any tax deficiencies.
Eligibility: To qualify for Innocent Spouse relief, you must file the necessary Innocent Spouse paperwork no later than 2 years after the date the IRS first attempts to collect the tax from you.
3 Types of Relief:
- Innocent spouse relief — This type of relief is available if there is an understatement of tax or a deficiency on a tax return due to erroneous items of the spouse or former spouse of the requesting taxpayer. A deficiency would result when the IRS assesses an additional liability on unreported income or disallowed deductions. The taxpayer must demonstrate that when the tax return was signed, the taxpayer did not know and had no reason to know that the understatement of tax existed. The IRS will take into account all the surrounding facts and circumstances in order to determine whether it would be unfair to hold the requesting taxpayer liable for the understatement of tax.
- 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 times 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 taxpayer believed that their spouse or former spouse would pay the tax due on a joint tax return but failed to do so.
To speak with someone about your specific situation and to find out with some certainty whether the Innocent Spouse Program is a viable option in obtaining tax relief, please contact us today.