Innocent Spouse Relief
Married taxpayers typically file joint tax returns because of the tax benefits afforded to this filing status. In doing so, however, both taxpayers accept joint and several liability for the tax (and any additions to tax, interest, or penalties). This remains true even when one taxpayer earned all the income or claimed improper deductions or credits. The liability will typically survive divorce, even if one spouse is court ordered to pay the amounts due. In some circumstances one of the taxpayers can seek innocent spouse relief to escape the typical joint and several tax liability prescribed by the IRS.
The IRS provides three types of relief from joint and several liability:
- Innocent Spouse Relief: provides you relief from additional tax if your spouse failed to report income or reported improper deductions or credits.
- Separation of Liability Relief: provides for the allocation of additional tax owed between you and your current or former spouse from whom you are separated because an item was not properly reported on the joint return. If approved you will be allocated only the tax for which you are responsible.
- Equitable Relief: provides relief when you do not qualify for innocent spouse relief or separation of liability relief for something not reported properly on a joint return and generally attributable to your spouse. This can also provide relief if the correct amount of tax was reported on the joint return, but the tax remains unpaid.
Qualifying for innocent spouse relief can frequently relieve you of aggressive collection action by the IRS followed by years of payments on back taxes. You can improve your chances of receiving approval for innocent spouse relief by working with a licensed professional that has experience negotiating with government agencies.
Podraza CPA can provide expert guidance on the application process and advocate your position before the IRS.
Call us today to find out if you qualify for innocent spouse relief.
Podraza CPA can provide expert guidance on the application process for innocent spouse relief and effectively advocate your position before the IRS.