The IRS can and will place a tax debt on you that is actually the responsibility of your spouse or ex-spouse if you filed joint returns. If you feel victimized and have received notice of a tax debt that you are not responsible for, you may qualify for the IRS Innocent Spouse Relief Program. Under certain conditions a spouse can claim ignorance to an understatement of taxes due and be relieved of a joint tax debt. To increase your chances of a successful outcome you should call a trained tax professional to deal with the IRS on your behalf.
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Do I Qualify?
Married taxpayers filing jointly are held equally responsible for the accuracy of their return and the payment of the 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 a specific criteria.
This form of tax penalty or relief may be granted to the spouse or party that may be innocent for a variety of reasons. Each type of relief has its own specific requirements. Speak with your Local, BlackFin Certified™ Tax Professional today to see if you qualify.
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.
Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understated tax.
You have the Right to Tax Representation
Contact your local BlackFin Certified™ Tax Professional for a Free, No Obligation-Consultation
Types of Relief Explained
Innocent Spouse Relief
If you filed a joint return, you may be entitled to relief by separation of liability if you are no longer married, or are legally separated or; if you were not a member of the same household, that is, you are living separately or estranged from the spouse with which you filed the joint return.
Relief by Separation of Liability
The innocent party may be relieved of responsibility for paying tax, penalties, and interest if the other party was the guilty in doing something improper or wrong on the innocent party's tax return – You may qualify for Separation of Liability if you are widowed, legally separated or not living together for at least 1 year.
If you do not qualify for innocent spouse relief or relief by separation of liability, you may still be eligible for innocent spouse relief through equitable relief. As an example, equitable relief might apply for the innocent spouse when the other spouse took money intended for paying taxes and used it for other purposes.
How it Works
Once you request relief, the IRS will contact the other party on the return. They will be asked to present information that may be helpful in establishing relief of your liability. Your identity will be protected during this process. Any issues requiring special consideration, such as fear of violence or retaliation, can be reported to the IRS but will not affect the determination of relief.
Taxpayers must file for this IRS relief program within 24 months of the tax debt notice. The IRS can take six months to review a claim for Innocent Spouse, during this period the partner who is held liable for the outstanding tax debt can appeal the IRS’ decision. It’s important that you contact an ethical Tax Professional to represent you and your case to the IRS.
“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 balance due (and underpaid tax) then innocent spouse does not apply to you.
For a Free Consultation, Call your Local BlackFin® office today!