Joint Tax Liability and the Innocent Spouse Relief

The modern tax code places liability on both spouses. This means the Internal Revenue Service (IRS) will look at the tax failures of one spouse as a failure on both spouses. The IRS could expect both spouses to pay off the entire amount owed or simply split any owed taxes between the two spouses.

This makes sense as married couples are often financially dependent on one another, but what happens if my spouse failed to pay their or my taxes without me knowing? Unfortunately, we’ve seen too many clients come to us looking for help when their spouse got into financial trouble and failed to consider the liability that would fall into the other spouse’s lap.

Thankfully, the IRS has parameters in place in these cases, specifically “Innocent Spouse Relief.” Some spouses or divorcees find out their spouse was hiding business or other income from them which later results in steep tax liabilities.

If this or another reason has caused you to be held liable for tax debts that simply aren’t your fault or responsibility, you’ll need to file a Form 8857 with the IRS.

You will need to file for relief within two years of the IRS initially attempting to collect the unpaid tax debt. The IRS will consider the circumstances to determine if you qualify for this form of relief, including proof of:

  • A jointly-filed tax return
  • Erroneous claims such as income, credits, or deductions on the part of your spouse
  • Proof you signed the return without being aware of the errors

You will likely need to provide information to the IRS about your overall tax education and officials will look at your filing history. For instance, if you’ve frequently filed the taxes on behalf of your spouse or frequently filed your own taxes in the past, you may be less likely to qualify for relief. Other factors such as the length of your separation, total tax liability, widow status, and the current financial circumstances of both spouses will play a role in the final ruling on your request for relief.

Congress has been tweaking the rules surrounding Innocent Spouse Relief since initially passing the Innocent Spouse Act in 1971. These rules could change as the tax years pass, so it’s important to stay up-to-date on any changes.If you believe you qualify for relief and your spouse failed to handle your taxes properly, you’ll need an attorney who can help you clear up issues with the IRS. Attorney Robert V. Boeshaar is your Seattle tax attorney. You can read more about Innocent Spouse Relief in his free e-book on the subject. If you have more than $30,000 in tax debt and you’re ready to resolve your dispute with the IRS, contact us today.

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