Innocent Spouse Relief
Many people enter into marriage with the best of intentions, but sometimes things don’t work out the way we hope. If you find yourself in a situation where your spouse has tax debt that you didn’t know about, you may be liable for that debt unless you qualify for innocent spouse relief. Innocent spouse relief allows innocent taxpayers to avoid paying taxes on a joint tax return where their spouses caused an understatement of tax liability. To qualify, you must have filed a joint tax return, not known about the understatement at the time you signed the return, and not benefited from the underpayment.
If you think you might qualify for innocent spouse relief, it’s important to act quickly; the IRS has a limited window of time in which taxpayers can request equitable relief. Don’t let tax debt ruin your life – if you think innocent spouse relief might be right for you, get in touch with a tax professional today.
What is innocent spouse relief and can it help me?
The IRS provides relief to taxpayers who can prove that they did not know, and had no reason to know, that their spouse or ex-spouse was underreporting income or otherwise not paying taxes on a joint tax return. This relief can help you avoid paying taxes on money earned by your spouse or ex-spouse. To qualify for innocent spouse relief, you must meet certain requirements.
If you qualify for innocent spouse relief, you will not be held responsible for paying taxes on your spouse’s or former spouse’s under-reported income on a joint return. You may also be eligible for relief from interest and penalties that have accrued on your spouse’s or former spouse’s unpaid taxes.
What is the difference between innocent spouse and injured spouse relief?
Innocent spouse relief is for taxpayers who can prove that they did not know, and had no reason to know, that their spouse or ex-spouse was underreporting income or otherwise not paying taxes on a joint return. Injured spouse relief is for taxpayers who filed a joint return and are not responsible for the unpaid taxes of their spouse or ex-spouse.
Both innocent spouse relief and injured spouse relief can help you avoid paying taxes on money earned by your spouse or ex-spouse. To qualify for either type of relief, you must meet certain requirements.
If you qualify for innocent spouse relief, you will not be held responsible for paying taxes on your spouse’s or ex-spouse’s under-reported income. You may also be eligible for relief from interest and penalties that have accrued on your spouse’s or ex-spouse’s unpaid taxes.
You may also be eligible for a refund of any taxes that were withheld from your paycheck or other income sources.
Tell me the eligibility of innocent spouse relief?
Legal relief for spouses cannot be automatically granted. First, you must have filed a joint return. The balance must have been attributed to your spouse or former spouse. You also must show that you did not know, and had no reason to know, that your spouse or former spouse was underreporting income or otherwise not paying taxes on a joint tax return.
If your case meets the above criteria, you may qualify for innocent spouse relief. You will not be held responsible for paying taxes on your spouse’s or former spouse’s under-reported income on a tax return.
If you do not meet the criteria for innocent spouse relief, you may still qualify for injured spouse relief.
The theory of innocent spouse relief
Many marriages opt to file joint returns to receive certain advantages. Because both individuals must be able to pay taxes, it can be a hefty burden for them to file together. A married person who claims jointly for income taxes is additionally responsible for any outstanding taxes or fines levied on their accounts. The notion of joint and several liabilities pertains to this situation. Both spouses can also share in the responsibility of paying their tax liabilities.
The problem that can arise is if one spouse misrepresents information or intentionally withholds information in order to owe less on a tax return. The other spouse, who may not be aware of the deception, can be on the hook for the entire amount of taxes plus any penalties and interest. This is an unfair outcome, which is where innocent spouse relief can come in and help.
Innocent spouse relief requirements
There are three general requirements that must be met in order for a person to qualify for innocent spouse relief. These requirements are as follows:
- That the individual did not know, and had no reason to know, that their spouse or former spouse was underreporting income or otherwise not paying taxes on a joint return;
- That the underpayment of tax is attributable to your spouse or former spouse; and
- That it would be unfair to hold you liable for the underpayment or unpaid tax.
The first two requirements are pretty straightforward. The third requirement is a bit more nebulous, but the IRS has provided some guidance on what factors they will consider when determining whether it would be unfair to hold a person liable. These factors include:
- Your financial resources relative to those of your spouse or former spouse;
- Your mental and physical health;
- Whether you were in compliance with all tax laws for the years in question;
- Whether you filed all required tax returns; and
- Whether you can prove that you did not benefit from the underpayment of taxes.
These are just some of the factors that the IRS will take into consideration. They may also consider other factors that they feel are relevant to the case.
How do I file for innocent spouse relief with the IRS?
If you are seeking divorce support for innocent couples you will need the 8857 Form 990. You could also skip the 7-page questionnaire to give the same information and send an official written declaration. The IRS determines which taxes are payable by the customer. You may be eligible for innocent spouse relief by the IRS if you have requested innocent spouse relief. You can request information about your claim with your partner. During an emergency, you should speak directly with an attorney at 1-877-999-7434 or via live chat. It collects tax and penalties from spouses or ex spouses and issuing them a tax refund.
What is included in the rules for relief?
In addition, the rules for spouse exemptions cover the period for filing and the collection of the information. A married person who wants a divorce can file a claim on Form 8857 within one year pending the first IRS request. Then it may be necessary to file your taxes if your spouse is responsible in this case. It’s critical for taxpayers to understand their duty in a timely manner so that they can plan accordingly.
How long does it take to get innocent spouse relief?
The filing period for an IRS Form 8857, request for innocent spouse relief, can be six months.
When to contact a tax expert
This procedure is typically more challenging than most people are aware of. If you have no knowledge of this area of tax legislation or are not confident on how to proceed then our tax professionals can help. If you already filed Form 8857 with the IRS and were denied, you have another option to obtain separation of liabilities and equitable relief. For additional information about the options please give us a call.