What is innocent spouse relief?

Being married has its advantages. Amongst them are several tax benefits that can lessen your obligation to the IRS each year. Yet, there are instances where one spouse’s actions or inaction has a significant effect on the family’s tax liabilities, which may not arise until after an audit. When a family finds itself strapped with hefty tax liabilities, a spouse who feels like he or she shouldn’t be on the hook for tax payments may take action in an attempt to protect themselves.

One step that can be taken is to seek innocent spouse relief. If granted, this type of relief removes all tax liability from an innocent spouse. In order to qualify, though, certain requirements must be met. For example, underreported income and improperly reported deductions and credits must be solely attributable to the other spouse. Additionally, the spouse who seeks relief must show that he or she was unaware of these errors at the time of signing the tax return. The IRS, or the court, must also find that, given all of the facts at hand, finding the innocent spouse liable for the tax liabilities would be unfair.

An individual may also wish to escape their spouse’s tax liability if they separated from that divorce. To successfully do so, it must be shown a joint return was filed but that the couple is separated or hasn’t resided in the same household at any time during the 12-month period preceding seeking relief. However, if the spouse seeking relief had actual knowledge of the issue at hand when he or she filed the tax return, then he or she cannot escape the liabilities associated with it.

As one can see, tax issues can be enormously complicated. The IRS is aggressive when it takes collection action, too, which is why those dealing with tax problems need to act quickly and competently. Fortunately, there are skilled legal professionals who are ready to help address individuals’ tax needs.