IRS Innocent Spouse Relief — Do You Qualify?
The Innocent Spouse Relief is a tax relief that is given to taxpayers who filed a return jointly with their spouse and a tax liability arose from the filed returns.
Under this relief, if one of the spouses can prove that they were unaware of the erroneous information on the tax return that resulted in the tax liability, they can be exempted from the tax burden so that the whole tax debt becomes only liable to the other spouse. The relief was introduced into the tax code to protect an innocent spouse who would have otherwise been held responsible for taxes in which they had no part to play.
The IRS Innocent Spouse Relief has undergone changes over the years.
One of the recent changes to the relief is the removal of a two year limitation. Before this time limit removal, a spouse was given only two years from the time that the IRS notified the couple of the tax debt to the time of claiming the relief. This limitation unfortunately resulted in many innocent spouses being unfairly held liable for taxes.
Many spouses complained that the IRS only contacted the “guilty” spouse to inform him of her of the tax debt, resulting in the guilty spouse withholding the crucial tax information from the other spouse until the two year time limit had lapsed. In many cases, the couples separated or divorced by the time the IRS contacted them. However, now that the 2 year time limit has been removed, spouses can claim the relief without any time limitations.
The ‘innocent’ spouse must recognize that they could lose their opportunity for the relief if they fail to make the claim within 2 years from when she or he is directly made aware of this tax obligation.
IRS Rules for Qualification of Relief
Several rules apply for the qualification of the Innocent Spouse Relief. Some of these rules are:
- Innocence of Spouse. The spouse claiming the relief must provide proof that he or she was innocent and being held liable would be unfair. The understated taxes must have been wholly brought about by the “guilty spouse” and the innocent spouse must show that he or she was unaware of the due taxes.
- Benefit to Innocent Spouse. The IRS could still hold an otherwise innocent spouse liable if they show that the spouse could have known of the fraud or negligence, and actually enjoyed the benefits of the transgression. If the spouse for example, enjoyed an affluent lifestyle but did not question the source of funds, he or she can be held accountable for the tax felony.
- Spouse in an Abusive Marriage. The relief is also extended to spouses in abusive marriages. Even if a spouse in an abusive marriage was aware of the due taxes, he or she can still claim the relief.
- Filing for Relief. To qualify for the relief, a taxpayer is required to file IRS Form 8857, “Request for Innocent Spouse Relief Form”. The spouse is required to explain in the form how he or she is innocent in the situation.
State Law on the Spouse Relief
Many states have differing rules pertaining to the application of Innocent Spouse Relief. However, for most states, once a spouse is granted relief by the IRS, they automatically qualify for a state tax relief. However, some states may have stricter rules and it is recommended to always obtain assistance from tax and legal professionals.
For years D Tax Solutions, a trusted firm of tax professionals consisting of tax defense attorneys, CPAs, and enrolled agents, has helped many businesses and individuals with their IRS and State tax problems. The D Tax Solutions firm is located in Irvine, California, online at https://www.dtaxsolutions.com and telephone at 888-578-9568.
Contact D Tax Solutions today for a free consultation regarding an IRS Innocent Spouse Claim, or any other IRS issue – https://www.dtaxsolutions.com and 888-578-9568.
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Get relief from the IRS today and contact D Tax Solutions located at 20 Truman, Suite 103, Irvine, California; Online at https://www.dtaxsolutions.com; Telephone at 888-578-9568.