Innocent Spouse / Injured Spouse Relief
Marrying the wrong person could have very serious tax implications.
INNOCENT SPOUSE RELIEF
Did you know that you can get out of the tax debt due to the misdeeds or fraud committed by your spouse? Innocent Spouse Relief was designed to alleviate unjust situations where one spouse was clearly the victim of fraud perpetrated by their spouse or ex-spouse.
When a married couple files a joint return, each spouse has joint and several liability, which means each is responsible for the tax and any interest or penalty due on the joint return when it is filed and for any additional liability if the IRS determines more is due after the return is filed. One spouse may be held responsible for all the tax due, even if all the income was earned by the other spouse, or even if the items were incorrectly reported by the other spouse on the joint return. A divorced taxpayer may be held jointly and individually responsible for any tax, interest, and penalties due on a joint return filed before the divorce. This responsibility may apply even if the divorce decree states that the other spouse will be responsible for any amounts due on previously filed joint returns. To the extent a spouse is found to be innocent, she or he is relieved of tax, interest and penalties. The innocent spouse still remains liable for any taxes, interest and penalties that do not qualify for relief.
There are three types of relief available (the specific requirements will be discussed later):
- General or innocent spouse relief
- Separation of liability
- Equitable relief
If you qualify for Innocent Spouse Relief, you may not owe any tax. Contact us for details.
If the IRS took the taxpayer’s share of a joint refund to pay past due debts owed solely by the spouse (child support, spousal support, Federal or state taxes), the taxpayer is eligible to apply for Injured Spouse Allocation. An injured spouse request should be filed if both of the following apply and the spouse wants a refund of his or her share of the overpayment shown on the joint return:
- The injured spouse is not legally obligated to pay the past-due amount.
- The injured spouse made and reported tax payments (such as federal income tax withheld from his or her wages or estimated tax payments), or claimed a refundable tax credit.
Properly completing Injured Spouse relief paperwork can be confusing, contact us for details.
