Innocent Spouse Tax Relief
What is innocent spouse tax relief, who qualifies, what does it cost to file?
When you decide to file a joint tax return with your spouse, you and your spouse are both liable for any taxes owed, including tax penalties and interest that accrue on unpaid taxes. This is the very nature of a jointly filed tax return, you are both liable and it’s rare that a spouse can get out of being liable for tax debt from a jointly filed return.
Fortunately, there are a few situations in which a spouse can request innocent spouse relief. This essentially comes down to you proving to the IRS that you were not aware of any errors or omissions on the tax return and that you shouldn’t be held liable for your spouse’s tax-related mistakes.
Qualifying for Innocent Spouse Tax Relief
To qualify for innocent spouse relief, you must meet the following requirements:
- You filed a joint return in which your spouse understated or misrepresented your tax liability. Your spouse could have made an error or omission when reporting income or when entering deductions or credits.
- At the time that you filed the joint return, you had no idea that there was an understatement of tax liability.
- After looking at all the circumstances, the IRS finds that it would be unfair to penalize you for the error or intentional omission.
- You and your spouse haven’t engaged in any schemes to conceal or illegally reduce your tax liability, such as transferring property to one another to avoid tax burdens.
Injured Spouse vs. Innocent Spouse Tax Relief
Applying as an injured spouse is not the same as applying for innocent spouse relief. An injured spouse can apply to receive his or her share of a tax refund when that tax refund has gone to the spouse’s separate bills, such as spousal or child support, student loans, or state tax debt.
Do You Qualify as an Innocent Spouse?
Your tax situation may qualify you for innocent spouse relief however, there are a number of nuanced details to evaluate. A W Tax Group tax attorney is best suited to ask the right questions and help you determine your eligibility. Call us now for a free evaluation.