Married couples filing joint returns are held equally responsible for their tax return and the payment of appropriate taxes. In some cases, however, spouses can be relieved of all IRS tax, interest, and penalties on a joint return if they are able to meet specific criteria. In essence, three types of relief are available for people who find themselves in this situation and can qualify: innocent spouse relief, separation of liability relief, and equitable relief. Each has different requirements.
You must meet all of the following conditions to qualify for innocent spouse relief:
- You filed a joint return.
- There is an understated tax on the return that is due to “erroneous items” of your spouse or former spouse.
- You can show that when you signed the joint return you did not know, and had no reason to know that the understated tax existed (or the extent to which the understated tax existed).
- Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understated tax.
“Erroneous items” are what the IRS considers underreported income or overstated deductions and credits. If the amount the IRS is trying to collect from you is from an original return balance due (an underpaid tax), then innocent spouse relief does not apply to you.
With relief by separation of liability, the tax, interest, and penalties owned on your joint return is separated between you and your spouse, with the amount you have to pay generally proportionate to the amount the IRS has determined you are responsible for. Relief by separation of liability only applies to understatements of your tax. Refunds are not allowed.
To qualify for relief by separation of liability, you must be no longer married to, or are legally separated from your spouse, or have not been a member of the same household as your spouse during the 12-month period ending on the date you file for relief. This type of relief is available only for an understated tax (not an original return balance).
You must meet a number of criteria to be eligible for equitable relief, including not qualifying for innocent spouse or separation of liability, and being able to prove it would be unfair for the IRS to hold you responsible for understatement or underpayment of your taxes.
Our experienced tax professionals have numerous techniques available to help protect you from liability incurred due to a current or former spouse. Call us today for a free consultation with a tax professional to see if the innocent spouse exception is the best option for you.
You Have a Right to Tax Representation
If you have been contacted by the IRS or your state’s Department of Taxation, or have received tax liens, levies, or notices of IRS intention to do so, call 877-829-3535 today for your free 15 minute tax analysis and consultation.