Understanding Innocent Spouse Relief
Dealing with tax issues can be stressful, especially regarding joint tax returns for married couples. If you are facing a tax problem due to your spouse’s or former spouse’s actions, then you may be eligible for innocent spouse relief. Innocent spouse relief is a legal concept allowing a taxpayer to avoid paying taxes on joint tax returns filed with their spouse or ex-spouse who committed tax fraud or evasion. At Goldburd McCone LLP, our lawyers can help you understand your options and file for innocent spouse status if you are eligible.
What Is Innocent Spouse Relief?
Innocent spouse relief is a provision in the tax code that allows an innocent spouse to be relieved of tax liabilities that their current or former spouse incurred. The relief can be granted if the Internal Revenue Service (IRS) determines that holding the innocent spouse responsible for the tax liability of the liable spouse would be unfair. If the IRS grants innocent spouse status, then the innocent spouse will not be held liable for the understated tax, penalties or interest.
Qualifications For Innocent Spouse Relief
To qualify for innocent spouse relief, you must meet the following conditions:
- You filed a joint return with your spouse.
- There is an understatement of tax on the return.
- This understatement is solely attributable to your spouse.
- You did not know about the understatement of tax when you signed the joint return.
- You filed your petition for relief before the expiration of the period of limitation for collection.
- Considering all the facts and circumstances, holding you liable for the tax understatement would be unfair.
Often, seeking innocent spouse relief can be complex and overwhelming. It is essential to have the support of a skilled lawyer to guide you through the process.
How Is Innocent Spouse Relief Different From Injured Spouse Relief?
Injured spouse relief is different from innocent spouse relief. When a couple files a joint return and one spouse owes past-due federal tax, state tax, or child or spousal support, the other spouse may be considered an injured spouse. Injured spouse relief is a provision that allows the spouse who is not responsible for the past-due amounts to receive a refund for their portion of the overpayment of taxes. On the other hand, innocent spouse relief provides relief from the liability of taxes, penalties and interest incurred due to the actions of a spouse or former spouse.
Factors In Determining Whether Relief Is Granted
Not everyone will receive relief from the IRS. Several factors contribute to whether the agency grants relief, including:
- Domestic abuse existed in the marriage.
- You did not challenge a known tax understatement out of fear of harm.
- You did not challenge a known tax understatement out of threats or coercion.
- You did not challenge a known tax understatement because you had poor mental or physical health.
- Liability for your spouse’s tax issues would cause you economic hardship.
- The number of factors in favor of relief are greater than the number of factors against it.
- Your marital status is divorced, separated or no longer living together, but you filed a joint tax return.
If you experienced any of these conditions, let us know. Our tax lawyers can help you understand whether and how these factors and others will affect your petition for relief.
How To Make An Innocent Spouse Claim
To petition for relief, you must file Form 8857. This is the document that the IRS provides for taxpayers whose current or former spouses allegedly committed tax evasion or fraud. Although the IRS website provides general directions and you have the right to file this document on your own, this is not necessarily wise. Your best chance of getting relief is to work with a tax attorney who has handled many innocent spouse relief claims. Our team can walk you through the process step by step and may even be able to get you greater relief than you would have secured on your own.
Understanding Separation Of Liability Relief
If you are no longer married to your spouse, you have the option of seeking separation of liability relief. This is intended for separated or divorced couples who filed joint tax returns. To qualify, you must be no longer living together or no longer married. However, separation of liability relief does not reimburse you for past taxes that you have already paid. It can protect you from having to pay future taxes due on certain income and assets belonging to your spouse.
Learn More About Innocent Spouse Relief Today
If you believe that you qualify for innocent spouse relief, contact Goldburd McCone LLP today for a case evaluation. With decades of legal experience, our skilled tax attorneys have represented individuals and corporations in New York City, Long Island and across the country in tax disputes and controversies. They are dedicated to providing intelligent advocacy and creative solutions. To make an appointment for your consultation, call 212-235-1817 or toll-free at 866-712-9505, or contact us online.