If the IRS is attempting to collect outstanding back taxes from you as a result of you filing a joint return with a former spouse you may be able to find tax relief using the innocent spouse rules.
Married taxpayers who file joint tax returns are jointly liable for any unpaid taxes from those returns even though the tax is attributable solely to one spouse. However, the law provides tax relief from a joint liability in certain circumstances. One way to qualify for innocent spouse relief is under the streamlined equitable relief rules. Using the equitable relief provisions a spouse may be granted relief from a joint a joint tax liability if under the facts and circumstances it would be inequitable to hold an individual liable for all or a part of a joint tax liability.
The first step in requesting equitable relief is to determine whether you meet the following conditions.
- Must have filed a joint return for the year requesting relief.
- Relief is not available under another provision of the tax law.
- Request is timely filed.
- The spouse requesting relief did not knowingly join in the filing of a fraudulent joint tax return.
- The unpaid taxes from which you are seeking relief are wholly or partially attributable to your spouse. However, you may be granted relief for taxes attributable to you if your spouse misappropriated funds, committed fraud or you were the victim of abuse.
- There was no fraudulent transfer of assets between you and your spouse.
- If you meet the above conditions you may request a streamlined determination if you establish the following:
- You are no longer married to the spouse from which you request relief;
- You would suffer economic hardship if relief is not granted; and
- You did not know or have reason to know that your former spouse would not or could not pay the tax. If you were the victim of abuse by your former spouse or he/she maintained strict control over the household finances which restricted your access to such information and you feared to question whether payment would be made, then you will be treated as meeting this factor.
If you do not qualify for a streamlined determination, you may still be entitled to equitable relief based upon the facts and circumstances of your case and considering factors outlined by the IRS. We will discuss these factors in a future blog.
If you would like to know if you may qualify for innocent spouse tax relief, call the tax professionals at East Coast Tax Consulting Group today for a free consultation.