In some cases, the tax debt owed by your spouse should not be your responsibility.
If you’re being held liable for IRS back taxes as a result of filing a joint return with your spouse or former spouse, you may be eligible for tax debt forgiveness. Although the law holds both of you responsible for the entire tax liability, the IRS understands that in some circumstances, a person may be the innocent victim of a spouse’s misdeeds regarding a joint tax return. East Coast Tax Consulting Group can help you navigate the IRS guidelines for innocent spouse relief.
There are three types of tax relief for innocent spouses:
You will be relieved of paying any tax resulting from your spouse or former spouse omitting income, improperly deducting expenses, or claiming tax credits. You must meet the following criteria:
- You must have filed a joint return which has an understated tax that is due to erroneous items of your spouse or former spouse.
- At the time you signed the return, you did not know or have reason to know, that there was an understated tax.
- Considering all of the facts and circumstances, it would be unfair to hold you liable for the understated tax.
Separation of Liability Tax Relief
This type of relief allocates the understated tax on your joint tax return between you and your spouse or former spouse. To qualify, you must meet one of the following conditions:
- You are either divorced or are legally separated from the spouse with whom you filed the return, or
- You did not live in the same household as the spouse with whom you filed the joint return at any time during the twelve months prior to filing the request.
- You must not have had knowledge of the item that caused the understated tax.
Equitable relief may apply if there is either an underpayment of the tax shown on the tax return or an understatement of the tax. To qualify for equitable relief, the following conditions must apply:
- You don’t qualify for innocent spouse relief or separation of liability relief.
- You didn’t pay the tax (although there are certain exceptions to this condition).
- You and your spouse or former spouse did not transfer assets to one another as part of a scheme to defraud the IRS.
- Your spouse or former spouse did not transfer assets to you for the purpose of avoiding the tax or the payment of tax.
- You did not file your return with the intent to commit fraud.
- After considering the facts and circumstances, it would be unjust to hold you accountable for the understated or underpaid tax.
- The income tax liability for which you seek relief is attributable to an item of your spouse or former spouse.
Request for Innocent Spouse Relief
Don’t face unfair tax debt accrued by your spouse alone. The tax experts at East Coast Tax Consulting Group will review your circumstances and identify the best spousal tax relief option for you. Our team will work through the request for innocent spouse relief application process with you to ensure you have the best opportunity to be granted innocent spouse relief.