Although filing a joint return has its tax advantages, it has certain downsides too. When you submit a joint return along with your spouse, you are jointly and equally responsible for all the tax liabilities on tax return and penalties. This implies that if you don’t have any income or are unaware of the filed return details, you are still equally liable for tax payment. Based on your situation, you may be eligible for Innocent Spouse Tax Relief, that can provide you an exception to the general rule of joint liability. If you believe you may qualify and need a reliable law firm to claim Innocent Spouse Tax Relief, The Law Offices of Nick Nemeth will help you with the best course of action. To help you get started, we present all you need to know about the different types of tax liability relief under Innocent Spouse Relief. Read on.
Types of Innocent Spouse Relief
1. Traditional Innocent Spouse Relief
This type of tax liability relief relieves you from additional tax assessed against your total joint return due to the incorrect claim made by your spouse or former spouse. There are two criteria to claim this relief:
- Presence of a wrong item on the joint return, which is solely attributable by your spouse. This item could be an income which your spouse failed to report or an inaccurately claimed credit or deduction.
- There is an understatement of tax on your return which you are unaware of.
2. Separation of Liability
Separation of Liability will only give you partial relief in case of an additional tax assessed from your joint return. The IRS agrees to distribute equal portions of the debt to both the spouses individually. In order to get relief from joint tax liability under Separation of Liability, you should meet one of the following criteria:
- You are divorced or legally separated from your spouse.
- You are widowed.
- Both of you are living in separate households during the last one year since you filed for a joint return.
3. Equitable Relief
You can claim this relief if you do not qualify to go for the other two Innocent Spouse Relief. If the IRS believes that it is unfair to hold one spouse accountable for the total tax debt, it goes for this catch-all variation of tax liability relief. However, it does not require the presence of an incorrect item on the joint return. Instead, it can be granted if the return was not paid after being adequately stated.
The Bottom Line
Applicants generally have 2 years to claim Innocent Spouse Relief starting from the date when the IRS attempted to collect tax debt from you. If you are not sure of your eligibility for tax relief, or you are receiving IRS notices, consult a tax attorney who can help you out in reviewing your case. For a confidential, no-obligation consultation with an IRS tax lawyer, fill out our contact form or simply call (972) 627-4580.