Are You Eligible for Innocent Spouse Relief?
There are many benefits to filing joint tax returns with your spouse or significant other. If your finances are connected, you are partners in the process and should be upfront about how you want to manage your finances.
Yet there are times when things get complicated and one spouse may not be aware of decisions the other is making on a joint return. These situations can get very stressful very quickly, as both individuals on a joint return share the responsibility of paying the entire amount of the tax owed to the IRS.
Yet the IRS understands that there are instances in which one spouse is entirely unaware of the actions of the other. If you can prove that your spouse—or former spouse—inappropriately reported items or neglected to include items on your joint return, you may not be held liable.
Do You Qualify for Innocent Spouse Relief?
In order to qualify for innocent spouse relief, you must be able to meet the following conditions:
- You signed off on and filed a joint tax return that contained an underestimate of taxes owed.
- Your spouse/partner must have made the error on your return without your knowledge.
- You must be able to establish that you were unaware of these errors at the time that you signed the tax return.
- You need to be able to make the case that it would actually be unfair to hold you accountable for the erroneous return.
- You must request innocent spouse relief within 2 years after the date the IRS initiated the collections process (after July of 1998).
How Does Innocent Spouse Relief Work?
If the IRS grants you innocent spouse relief, it means that you are no longer held responsible for the taxes due on the return in question, despite the fact that you signed the joint return. The IRS receives approximately 50,000 requests each year and grants less than half of those.
For most, the biggest impediment to this relief being granted is the specific condition that you must file within 2 years of the date that the IRS initiated the collections process.
In complicated relationships, it can take much longer to realize that there is a problem on a specific tax return, particularly if he or she is not the one who handles the money. T
he spouse who committed the error may also find ways to cover up the error by exercising intense control over finances or not sharing all documents related to the return(s).
One way to try to manage this process is to enlist the help of a tax firm or tax professional with extensive experience managing complicated returns.
If a third party is helping to file and reviewing your tax returns annually, they can keep an eye out for potential issues on your returns and help you if you think you might be eligible for innocent spouse relief.
Success Tax Relief has more than 30 years helping taxpayers apply for all types of programs that the IRS offers, including innocent spouse relief. Call us today at 1-877-958-6638.