SPOUSAL TAX RELIEF
The IRS can come after you for all unpaid taxes, even if they are completely your spouse’s fault.
Spousal Tax Relief
Many married couples choose to file joint tax returns so that they can receive more deductions. However, it also means both taxpayers are jointly and individually responsible for taxes, interests and penalty owed the IRS. Even after a divorce, a former spouse is at risk for taxes due on previously filed returns. If you feel you are unjustly required to pay the tax bill, contact IRS Solver so we can help you file and obtain tax relief.
If the IRS is coming after you for a tax bill that’s entirely your spouse or former spouse’s fault, you may find relief under the innocent spouse provisions. We can help you gather up evidence to prove to the IRS that you shouldn’t be held responsible for the tax bill.
Separation of Liability
Separation of liability allows you to separate the understatement of tax on your joint return with your spouse.
If the IRS doesn’t approve you for innocent spouse relief or separation of liability, you may still qualify for equitable relief. It’s possible to get equitable relief from an understatement or underpayment of tax.
You don’t have to bear a debt that is not yours.
The IRS may collect outstanding taxes, or understated taxes, either from you or your spouse (or former spouse). To benefit from the Innocent Spouse Tax Relief, you will have to prove only your spouse should be held accountable.
Actual Knowledge or Reason to Know
Are you in a position to prove without a doubt that you had no actual knowledge about a tax issue (understated tax, erroneous item, unreported income), nor any reason to know.
Indications of Unfairness
The IRS will consider several factors to determine if you are unfairly held responsible for the tax bill. Has your spouse deserted you? Are you separated or divorced? Did you benefit from the understated tax in any way?
When to File for Relief?
You should file as soon as you become aware of the liability (the IRS is proposing to increase the tax liability or you have received notice). You have 2 years after the IRS Collection Proceedings start to file for such request.
Separation of Liability
This type of spousal tax relief is characterized by the fact only the portion of unpaid taxes for which you are actually responsible will be allocated to you. To qualify for this relief, you must either be divorced or legally separated from the spouse with whom you filed a joint tax return or not have lived in the same house with the spouse when you filed a joint tax return.
Members of the Same Household
You may be eligible for separation of liability relief if you are not living together AND are not estranged. The relief doesn’t apply if you are temporarily living separately, or if you live in separate dwellings but are still communicating.
Burden of Proof
You will have to prove you qualify for all the requirements, had no actual knowledge, or didn’t transfer property to avoid tax. You also will have to support your claim to your allocated portion of the understated tax.
The IRS requires you meet certain thresholds in order to qualify for equitable relief, including: timely filing of the joint return, no transfer of assets or property to defraud the IRS or avoid taxes. You will have to prove you did not knowingly participate in a fraudulent return, and more. The IRS will examine facts and circumstances to determine if you may be granted equitable relief.
Whether you are still married or divorced, legally separated, widowed, or have not been a member of the same household at any time during a 12-month period prior the the determination by the IRS.
The IRS may favor equitable relief if paying the tax in part or in full will place you under hardship and prevent you to pay for basic living expenses.
Knowledge or Reason to Know
Again, the IRS will take a close look at any circumstances that may indicate you had knowledge or reasons to know, such as (but not limited to) your involvement in the household financial matters, your business expertise, your your lifestyle and expenditures.
There are many instances and factors that can weigh in favor of equitable the relief like physical or psychological abuse, mental or physical health, compliance with tax laws, … To navigate the maze of tax issues and collection resolution, we recommend you consult with IRS Solver. Our expertise will ensure no stone is left unturned.