If you have filed a joint tax return with your spouse, both you and your spouse and individually and jointly responsible to pay the IRS all taxes, penalties and interest due on your accounts.
Accordingly, the IRS can seek to collect the full value of the debt from either spouse, regardless of who earned the income, prepared the return, or otherwise caused the debt, penalties, or interest.
Recognizing that this can produce unfair results, when for example, one spouse operates a small business and the other wouldn’t have any way to know if the claimed deductions were legal, or when one spouse controls all the household finances, or in certain cases of domestic violence or divorce, the congress has allowed the IRS to offer Innocent Spouse Relief to relieve the innocent spouse of the liability their spouse created.
In order to qualify for innocent spouse relief your must demonstrate to the IRS that:
- You signed a joint tax return with your spouse.
- The return resulted in an understatement of tax due to an erroneous item your spouse included (or failed to include) on the return.
- You did not know, and had no reason to know of the understatement of tax at the time you signed the return.
- Looking at all the facts and circumstances, it would be unfair to may you pay the tax.
In addition to innocent spouse relief, a taxpayer may also qualify for equitable relief if that taxpayer can demonstrate that it would be inequitable to hold the taxpayer liable for the tax deficiency after taking into account all the facts and circumstances giving rise to he deficiency.
In order to seek innocent spouse relief, a taxpayer files IRS Form 8857. Though the form itself appears simple, in order to successfully obtain innocent spouse relief you must support your request with compelling evidence and a persuasive written argument.
If you are thinking of pursuing innocent spouse relief, let us help. Call 401-324-9344.