What is Innocent Spouse Relief and Do You Qualify?

Filing taxes jointly offers benefits but can lead to potential problems.

When you are married and file jointly you are telling the IRS that both parties are equally responsible for taxes owed even when one spouse earns all or the majority of taxable income. If some years down the line the IRS determines there was a deficiency in the amount of reported income or other errors on the joint tax return, the IRS will go after both spouses equally.

The spouses may be divorced or separated filing separate returns however, the deficiency in taxes where incurred when the return was filed jointly so both parties responsibility is equal. When the spouse who made the error makes him or herself unavailable, the IRS goes after the spouse it can find even if that spouse earned no income and was for example, a stay at home dad. Innocent Spouse Relief may then come into play but you first have to know What Innocent Spouse Relief is and How one qualifies.

The IRS realized that sometimes it is unfair to hold a spouse responsible for unpaid taxes. Innocent Spouse Tax Relief offers the innocent party a way to be relieved of a tax liability when the other spouse made mistakes, omissions or committed fraud on the joint tax return.

The IRS generally holds each party equally responsible for what is claimed in a joint tax return and both parties are responsible for back taxes, interest and penalties assessed. Sometimes when one spouse is simply not aware of errors and omissions or deliberate tax fraud was committed then that spouse, under certain circumstances, may qualify for Innocent Spouse Tax Relief.

To qualify for Innocent Spouse Tax Relief, typically a spouse must be able to prove he or she had no knowledge that there was an error or omission at the time the return was signed. The Innocent Spouse received no benefit from the understatement of income and received little or no benefit from monies received from a tax return.

Circumstances which may benefit the Innocent Spouse and may help qualify for tax relief can be the other spouse abandoned the innocent spouse, a divorce or legal separation.

The IRS will weigh all information to determine if a party qualifies for Innocent Spouse Tax Relief. Other non traditional methods to qualify are available, for more information one should contact a qualified attorney or tax advisor.