The IRS offers generous tax deductions when you file your returns as a couple. You can enjoy benefits such as increased chances of qualification for receiving large amounts of Earned Tax Income Credit, the Child and Dependent Care Tax Credit and more. Keeping these added advantages in mind, filing taxes jointly seems sensible from a financial standpoint. When you file jointly as a couple, both you and spouse are equally responsible for the entire tax debt. In such a scenario, if your spouse commits tax fraud and cheats the IRS without your knowledge, you are still liable for the joint tax debt. That is when you need to leverage the provision called Innocent Spouse Tax Relief. If you are on the lookout for a trusted law firm to request Innocent Spouse Tax Relief, the Law Offices of Nick Nemeth has got you covered. To help get you started, we present five things you need to know about Innocent Spouse Tax Relief. Read on.
Qualifications for Innocent Spouse Tax Relief
You must have filed your returns jointly with your spouse for you to qualify for innocent spouse tax relief. If you filed your taxes jointly, here are the three conditions that determine whether you qualify for innocent tax relief.
- Your spouse or ex had committed a mistake regarding your financials that led you to understate your tax liability when you filed for your joint tax return.
- You prove that you did not know, or had no reason to know that there was an understatement when the return was filed.
- The IRS finds it unfair to make you liable for the understatements in your joint returns.
When to file for an Innocent Spouse Tax Relief
You should file for an Innocent Tax Spouse Relief claim no more than 2 years from the date when the IRS first tried to collect taxes from you. Most times, you find it is only one spouse that files the returns while the other signs without going through the documents before signing. If you are not taking part in filing the returns, it is advisable to go through the returns before signing on them.
You are Not Required to be Single
You can file for an Income Spouse Relief even if you are still married to your spouse. To obtain the relief, the spouse requesting for a claim must prove they did not file or failed to file with any fraudulent intentions. They must also show that there were no assets transferred between both spouses for a fraudulent scheme or tax avoidance.
There Must be “Known” Matters
There are cases where you can prove you had no knowledge of over-claimed deductions or income understatements and can still be held liable for tax understatements. A section in Publication 971 outlines an eligibility title of “Actual Knowledge or Reason to Know” which states that if a reasonable person in a similar situation would have known about the tax issues, you remain liable. Therefore, if you did not know, but should have known, liability becomes a possibility. You cannot be granted an exemption if you failed to be vigilant and aware of your joint tax filings.
If you find yourself in a situation where your spouse filed fraudulent taxes, and you would like to know if you qualify for an innocent spouse relief, look no further—reach out to the Law Offices of Nick Nemeth. We have a team of experienced lawyers who practice in dealing with all sorts of tax relief provisions. For a confidential, no-obligation consultation fill out our contact form or simply call (972) 627-4580.