Owe the IRS Money After a Divorce Due to Your Spouse? You Could be an “Innocent Spouse”
If You Owe the IRS Money After a Divorce Due to Your Spouse’s Actions, You May be Entitled to “Innocent Spouse Relief”
Owing the IRS money can be a frustrating endeavor, especially if your former spouse is the reason why the IRS is coming after your assets and demanding payment. This is because married taxpayers who file jointly will be held “jointly and severally liable” for the owed taxes. This means that the joint filers will both be entitled to the entire tax liability. This is true even if your spouse was the sole earner, claimed improper deductions, or otherwise caused the debt owed to the IRS.
However, with the guidance of a New York City tax resolution attorney such as those at SAMUEL & STEIN, you may be able to establish that you are an “innocent spouse” which could alleviate some or all of the tax debt you allegedly owe the IRS. There are many pitfalls in traps in submitting a claim for innocent spouse relief, and applicants should consult a tax resolution attorney to learn how to prevail.
What is “Innocent Spouse Relief”?
If you were married and filed a joint tax return with your spouse or former spouse, and if your spouse or former spouse failed to report income, improperly took deductions or credits, or committed some other type of tax misconduct resulting in the tax liability, you may be entitled to be classified as an “innocent spouse” if you did not contribute or cause the tax liability. This would “break” the joint and several liability for the tax debt and leave you only liable for what you owe, if anything, pursuant to your own actions or what you knew.
What Do I Need to Prove to be Entitled to “Innocent Spouse Relief”?
In order to be entitled to innocent spouse relief, you must be able to establish all of the following requirements:
1) You filed a joint return with your spouse or former spouse that resulted in a tax liability that is “solely attributable to your spouse’s erroneous item.” This includes improper deductions, credits, and failing to claim income; and
2) At the time you signed the joint tax return, you did not know or had reason to know that there was this erroneous item or error; and
3) You must establish that, in considering all of the facts and circumstances, that it would be unfair to hold you liable for the tax liability.
While innocent spouse relief is common in divorces and matrimonial law, a spouse that is still married can still apply for innocent spouse relief. This can be done even when a divorce is not contemplated such as situations where an individual owes a business or applies for loans and wants to keep his or her credit history clean.
Is There a Time Limit to Seek “Innocent Spouse Relief”?
Yes, there is a time limit in seeking to innocent spouse relief. Under the law, you must request or move for innocent spouse relief no later than 2 years after the date of the time the IRS first attempted to collect the tax from you. This is generally when correspondence is sent to you advising of a tax deficiency.
Not Sure If You Qualify for “Innocent Spouse Relief”? Call SAMUEL & STEIN Today for a FREE Consultation to Learn Your Rights!
There is a lot that goes into tax resolution and it can be a complicated maze with many pitfalls. Call our experienced attorneys at Samuel & Stein today to learn how we can help you successfully navigate this matrix of tax laws and achieve financial freedom by dialing (646) 681-4193 or use the convenient “Evaluate Now” box on our webpage. Together we can help answer your questions and protect your rights.