Getting Married and Your New Spouse Owes the IRS? – Time to Dive into the Innocent Spouse Rule
The IRS and paying tax are difficult enough as a single entity.
When you join forces and become legally married it can multiply the complications especially if one party owes the IRS.
The innocent spouse rule allows a taxpaying spouse to avoid a tax obligation arising from errors made by their spouse on a joint return. Most often, the errors involve unreported income, past taxes owed, or an inflated deduction. The injured spouse in the case must apply for relief within two years of the IRS initiating collection or at the onset of the legalized marriage.
You qualify if:
- You were/are married and filed a joint tax return
- Your former/current spouse improperly reported income on a return file jointly
- You can prove that when you signed said joint return, you either didn’t know or had no reason to know that the income was incorrectly reported
- Taking all facts into account, it would be unfair to hold you liable for the unpaid taxes
There are three categories under which you may qualify as an innocent spouse according to tax law:
You can be relieved of responsibility for paying tax, interest, and penalties if your spouse did something wrong on your tax return. Or if they owed past debt to the IRS incurred before you were ever married.
Under this type of relief, you divide the understatement of tax (plus interest and penalties) on your joint return between you and your spouse.
If you do not qualify for innocent spouse relief or separation of liability, you may still be let out of responsibility for tax, interest, and penalties through equitable relief.
How to know when to contact a tax expert
To claim innocent spouse status, you file IRS form 8857. This signifies that your tax situation has become more complex than the average taxpayer.
If you’re unfamiliar with tax laws in this area and aren’t sure how to proceed, the Tax Pros at Babbitt Tax Attorneys of Bonita Springs, Florida stand ready to assist you throughout this process.
Additionally, if you’ve already filed Form 8857 and were denied tax relief, other options including Separation of Liability and Equitable Relief may still be available to you. To further explore these options and learn which may apply to your situation, schedule a free tax debt relief consultation by visiting Babbitt Tax Law’s contact us page.