If you are married, it is very likely that you will file a joint tax return to minimize your tax liability. However, by filing a joint return, you are agreeing to be held jointly and severally liable for any and all taxes, penalties, and interest due on the joint return. This is true even if a divorce decree or other agreement states that your spouse or former spouse will be responsible for the tax liabilities.
However, there are provisions that may protect one spouse from the mistakes of another. If you find that the IRS is attempting to collect on a tax that was incurred jointly with a spouse or former spouse, you may qualify for one or more of the following types of relief:
Innocent Spouse Relief
This type of relief is available if the taxes are due to your spouse or former spouse’s erroneous tax return information such as unreported income or disallowed deductions. In order to be considered an innocent spouse, you must demonstrate that when the tax return was signed, you did not know and had no reason to know that the understatement of tax existed. The IRS will take into account all the facts and circumstances surrounding your case in order to determine whether it would be unfair to hold you liable for the understatement of tax.
Separation of Liability
The liability for the understated tax may be separated such that the requesting taxpayer is granted relief from the liability if you are divorced, legally separated, or living apart from the spouse or former spouse at all times during the 12 months prior to the filing of the request. Separation of liability applies only to amounts owed that are not paid, and the IRS will not refund amounts that have already been paid.
If you do not qualify for separation of liability or innocent spouse relief, equitable relief may be requested in which case the IRS may determine that you should not be held liable for any understatement or underpayment of tax after taking into account all of the facts and circumstances. This type of relief is primarily requested when a person believed that the spouse or former spouse would pay the tax due on a joint tax return but failed to do so.
We specialize in representing taxpayers before the collections and examination divisions of the IRS and state tax agencies.
There is no charge for an initial consultation. Whether you choose a face to face meeting at our office or a telephone consultation, you will speak directly with an experienced CPA who will provide you with a free, confidential consultation.
We will ensure that your rights as a taxpayer are respected by the IRS. And by having us as your representative, you will no longer have to deal directly with the IRS.
While our office is located in the Dallas, Texas mid-cities area, we serve clients in almost all 50 states and have clients located in many areas around the world. All aspects of tax representation can be handled easily via phone, fax, mail and e-mail.
For more information on the innocent spouse provisions, please contact us for a free, confidential consultation.