Protecting yourself if your spouse or ex made tax mistakes

Getting married often means sharing everything from a last name to a home. You also typically merge your financial accounts and begin to share assets and debts. There are certain benefits to this practice. Especially when it comes to taxes, you and your spouse can likely save money by filing jointly instead of as individuals.

Unfortunately, sharing financial resources and tax filings with your spouse could mean that you wind up implicated in a legally questionable scenario involving the underpayment of taxes or other alleged forms of fraud on your joint tax returns.

Whether the person accused of underpaying taxes is your current spouse or a former one, you may have some forms of protection under federal law. Specifically, you may qualify for innocent spouse relief if you didn’t know they were not paying their fair share of taxes after filing joint returns.

The IRS has a form for spouses who didn’t play a role in tax fraud

Some people will joke that the IRS has a form and a policy for every single situation. It can certainly seem that way, especially when you consider the fact that they do have forms that you can execute to attest to your innocence after issues with joint returns.

IRS form 8857, Request for Innocent Spouse Relief, notifies the IRS that you do not think you should be part of your spouse’s audit or criminal proceedings. When you execute the form, you will attest to what knowledge you had of underreported income or other forms of tax evasion and fraud. Being honest here is very important because lying on these federal forms is a crime in and of itself.

Provided that you did not know about the unreported income, unpaid taxes or intentional fraud, you may not be held accountable for the mistakes or crimes of your current or former spouse. The IRS will look at your level of knowledge, as well as what benefits you gleaned from the situation, before determining what is fair and reasonable.

Don’t try to manage complicated tax issues on your own

There’s a reason that people say that death and taxes are the only real certainties in life. The government will track down and get the money owed to it as surely as all living beings eventually succumb to death. Simply claiming your innocence without any plan to protect yourself could leave you in a legally and financially precarious position.

Instead of just filing a form and hoping for the best after the government charges your spouse or your ex with tax fraud or tax evasion, consider working with an attorney separate from your ex’s efforts to defend themselves in court. Your lawyer can help you gather evidence and negotiate with the courts or the IRS for the best outcome in your situation.