When a married couple has filed for a joint tax return, the liability for paying the taxes becomes joint and several. While some can trick an unsuspecting spouse into filing for a joint return on their taxes, others may withhold knowledge of an underpayment of taxes. When filing for divorce, a spouse can also file for innocent spouse tax relief. Whether you are filing for innocent spouse relief while married, or doing so after separation, there are a few innocent spouse tax relief requirements you must fulfil. Before proceeding to file for tax relief, let’s take a look at some of the conditions you need to be working in your favor to get the exemption.
A Filed Joint Return for the Particular Year
One of the most basic conditions that needs to be fulfilled is that if you seek relief for a particular year, there should be a joint return filed by you and your spouse for the same year. Innocent spouse relief is only available to those who are held liable for their spouse’s taxes. If the IRS does not find a record of a joint return filed under both your names, you will not be eligible for the relief.
Joint Return Containing the Understatement of Owed Taxes
If a spouse fails to pay their part of the taxes on the joint return, there should be a record of understatement of the taxes that they owe to the state. Once you gain knowledge of the unpaid taxes and decide to file for innocent spouse tax relief, ensure that the joint return contains a statement which proves that the defaulting spouse has paid less than what they owe and is reflected under false activities or erroneous items.
Ability to Prove Your Unawareness of the Liability
You must be able to prove that your unawareness about the unpaid or underpaid taxes is genuine. Delinquent spouse may intentionally omit some income from the joint return or file them under false erroneous items. The IRS may be convinced of your innocence by comparing the amount of erroneous items to other item and your participation in the activity that resulted in the error. If the IRS finds that you had any knowledge about the process that resulted in the underpayment of the tax you will not be eligible for spousal tax relief.
Circumstance Should Work in Your Favour
Considering all facts pertaining to your situation it would be unfair to hold you liable for the outstanding tax amount. The IRS will look at all facts and circumstances to determine if it would be unfair to hold you liable for the understated tax liability. Some of the factors the IRS will look at include whether you benefited from the understated tax, if your spouse left you or cheated on you, and whether you have been divorced or separated from your spouse.
Even if you know the conditions needed to qualify for innocent spouse tax relief, it is advisable to seek legal advice to accurately determine your eligibility for the different types of tax relief the IRS offers estranged or duped spouses. The Law Offices of Nick Nemeth offer the best legal advice and tax debt solutions on all tax issues. Visit our website and fill out our contact form, and we will reach out to you. You can also call us at (972) 627-4705 for a free, no-obligation, consultation.