When couples file a joint return, they are jointly and severally liable for the tax, interest, or penalties that arise from the joint return, even if after they decide to go their separate ways. In the event of a delinquent spouse, the innocent spouse can file for three different types of tax relief from the IRS – innocent spouse relief, separation of liability relief, and equitable relief. You need to carefully determine which relief applies to your situation by thoroughly reviewing all three definitions given below and taking a close look at your joint income tax return. It is recommended to get legal help to enhance chances of getting a favorable outcome.The Law Office of Nick Nemeth provide expert help to spouse’s seeking IRS innocent spouse relief. Let’s take a look at all three types of tax relief and the conditions required to qualify.
Innocent Spouse Relief
The IRS innocent spouse rules provide unaware spouses relief from additional tax, if their spouse or ex failed to report income, reported it improperly, or claimed improper deductions or credits. If it is established that the joint return has been filed under duress, you are eligible for a tax exemption. Even couples who are still married can apply for an innocent spouse relief. Let’s take a look at other instances wherein you are eligible for innocent spouse tax relief.
- The understatement of tax on your joint return is solely attributable to your spouse’s erroneous item. An erroneous item includes income received by your spouse but omitted from the joint return. Deductions, credits, and property basis also constitute erroneous items if they are incorrectly reported on the joint return.
- If you can establish that at the time of signing the joint return, you had no possible knowledge of an understatement of tax, you may be eligible for innocent spouse relief.
- The IRS takes into account all the circumstances and facts surrounding the fraud, and after thoughtful consideration, may find it unfair to hold you liable for the understatement of tax.
Separation of Liability Relief
If a couple becomes legally separated, divorced, or no longer live together, one may apply for a separation of liability relief in the event of an understatement of tax by a delinquent partner. Unlike innocent or injured spouse relief, separation of liability can only be valid if the couple is separated or divorced. Here are a few requirements that the applying spouse must fulfill to avail separation of liability relief.
- As mentioned above, one of the most important requirements is that you must be divorced or legally separated. You need to provide proper documents stating that the mentioned conditions are true. If you are widowed, it makes you unmarried in the eyes of the law and also eligible for relief in the event of an understatement of tax.
- You need to provide proof that you and your spouse were not members of the same household at any time during the twelve month period ending prior to the date of filing for tax relief.
If you are unable to meet all requirements for any of the tax relief options mentioned above, you may still qualify for equitable relief. You will need to provide proof and substantial evidence supporting the fact that it would be unfair to hold you liable for your spouse’s taxes. It is always advisable to hire an experienced IRS attorney to help you craft your case. Nick Nemeth has years of experience handling diverse IRS tax issues and will help you gather relevant evidence and align all the required paperwork for your tax relief application. If you are applying for innocent spouse tax relief, or facing any legal issues with the IRS, you can contact the Law Office of Nick Nemeth by filling out our contact form, and we will get in touch with you. You can also call us at (972) 426-2553to schedule your free, no-obligation, consultation with Nick Nemeth.