Am I Responsible for My Spouse’s Tax Debt?
In the institution of marriage, you vow to come together and “the two shall become one” – traditionally that is. At least in a perfect world, the unity of marriage brings two individuals together to live together and share their lives with one another. Financially speaking, one spouse’s finances become the other, and vice versa. Going by this theory, this couple will share one another’s income, they’ll also share in each other’s debt. This includes taxes. When you say for better or worse, it could be assumed that part of the worse side of the equation is that you’ll probably be sharing some debt from here on out.
There are some positive aspects to this situation, however, especially considering that there might be a silver lining in filing a joint return together.
Sharing Your Spouse’s Debt
These days, you have the option to file your annual taxes “married filing jointly” or “married filing separately”. So the question for many married couples, whether they are together or separated is:
“Am I responsible for my spouse’s tax debt?”
That’s a good question.
While many taxpayers might want to file a joint tax return to get certain tax benefits, the tax liability is equally theirs as well. This includes any amount that may be due on that particular year even if they are divorced. Even if one party earned most of the income that tax year, “married filing jointly” means that the two are equally held responsible for that filing.
So, according to the general definition of “married filing jointly”, the answer is yes, BUT according to the Internal Revenue Service (IRS), there are at least three ways to relieve you from joint liability together on your joint tax returns:
1. Innocent Spouse Relief
The Innocent Spouse Relief option can exonerate you from any tax liabilities that you filed with your spouse due to any wrongdoing on their part. If they failed to report income or falsely submitted information to the IRS, you won’t be liable for those penalties. This is an ideal option if your spouse has some how fallen afoul of their obligations and it wasn’t due to anything you were involved in at all. While this may be used in cases of separation, there are also some instances where someone who is still together with their spouse might want to employ this tactic.
2. Separation of Liability Relief
This would apply to couples who are still married somehow but separated. During this separation period, there could be some wrongdoing in the way of improperly submitting information in an annual tax filing. The Separation of Liability Relief “provides for the allocation of additional taxes owed…when an item was not reported properly on a joint return.”
Since separation cases are unfortunately often messy, this has become an increasingly popular option. It also protectors taxpayers from any maleficence on the part of their spouses during a separation, which is why individuals turn to it when they fear that something might be awry with the way their significant other has been filing while they’re not together.
3. Equitable Relief
This third option may be applicable to those who aren’t able to qualify for the Innocent Spouse Relief or the Separation of Liability Relief. The IRS states that you might also “qualify for equitable relief if the amount of tax is correct on your joint return but the tax was not paid with the return.” This makes it something of a catchall for a number of unusual cases that people might run into that isn’t otherwise covered by the previous two plans.
That being said, it’s normally only placed under consideration if tax professionals haven’t been able to find another way to deal with a married or separated taxpayer’s problems.
Keep in mind that any of these three plans are only turned to if both partners were filing together. Some married couples file joint returns, in which case people wouldn’t usually have to avail themselves of these programs.
Helping You Navigate Through Tax Troubles
As with anything, there are certain conditions that need to be met when applying for any of the tax relief options above. To help you navigate through all of the paperwork to determine whether or not you qualify, Success Tax Relief, a tax relief firm located in Texas, can assist you with this process. If you’re at all concerned that you might not be able to qualify for whatever reason, then you’ll increase your chances by speaking with a professional. While nothing is a foregone conclusion when it comes to working with the IRS, a tax expert will certainly pull out all the stops to make sure you’ve gotten as good a deal as possible.
Our company has over 30 years consulting taxpayers and helping them get out of debt. We have experience working with Certified Professional Accounts (CPAs), tax lawyers, tax preparers and tax consultants. Our knowledgeable staff of experts has an open-door policy, available to assist you any time of the day, whenever you need assistance.
To schedule a free appointment, contact Success Tax Relief online today.