How Can Innocent Spouse Relief Help Me Avoid Unfair Tax Liability?

 Posted on October 25, 2019 in Taxation Law

Married couples have the option to file a joint tax return instead of separate tax returns. There are often benefits to choosing this filing status, but there can also be drawbacks. Couples who file jointly are “jointly and severally” responsible for any tax liability, interest, or penalties due. The terms “jointly and severally” mean that each spouse is legally responsible for the entire tax debt. When one spouse does not adequately fulfill his or her tax obligations, this can leave the other spouse in serious trouble with the Internal Revenue Service (IRS). Fortunately, there are several ways that a spouse in this situation can be released from tax liability. One of these types of tax relief is called “innocent spouse relief.”

What Is Innocent Spouse Relief?

Imagine this scenario: your wife is a business owner who struggles to keep track of her profits and expenses. When you jointly file your tax returns, the IRS notices that there are inconsistencies with the business income, expenses, and/or deductions. You are audited. As a result, both of you now owe a significant amount of money in back taxes. In situations like this, innocent spouse relief, also called innocent spouse protection, may help a guiltless spouse avoid his or her spouse’s tax liability.

Who Is Eligible for Innocent Spouse Tax Relief?

Innocent spouse relief is granted on a case-by-case basis and can be extremely difficult to obtain. You must meet certain criteria to qualify for this type of relief, including:

• You filed a joint tax return, and the understatement of the taxes owed was caused by inaccurate information regarding the other spouse.
• You were not aware of the inaccuracies on your tax return, and you did not have any reason to know about the understatement when you signed the tax return.
• It would be unfair to hold you responsible for your spouse’s tax debts due to the circumstances of the situation. For example, if you were tricked or forced into signing the tax return, the IRS would likely find you innocent of the resulting tax liability.

Fortunately, if you do not meet all of these criteria, you may still be eligible for a degree of tax debt relief. If you did not know that your tax return contained an erroneous item such as unreported income or false deductions when you filed, you could be granted partial relief.

Contact a San Jose Tax Liability Lawyer

Obtaining tax relief from the IRS can be extremely complicated. There are many restrictions about how and when you can file for innocent spouse relief. For the best chances of being released from your spouse’s tax debt, consult an experienced San Jose, CA tax law attorney. Call John D. Teter Law Offices at 408-866-1810 today to discuss your options.

Sources:

https://www.irs.gov/taxtopics/tc205

https://www.irs.gov/businesses/small-businesses-self-employed/innocent-spouse-relief

https://www.forbes.com/sites/stephendunn/2012/01/29/irs-lowers-the-bar-for-innocent-spouse-relief/#52a88dad4b8f