Innocent Spouse Relief

Innocent spouse relief

According to IRS guidelines, when a married couple files their taxes jointly, both parties are liable for the taxes owed no matter how much taxable income each person earned individually. If your spouse or former spouse misrepresented a portion of the income on your joint tax return you need a tax attorney to protect your finances and your rights. The IRS doesn't care who made the errors, they will go after whoever they can find first. Even if you're divorced, they will do all they can to recover back taxes, penalties, and interest.

In cases like these, you may qualify for innocent spouse relief. This special provision ensures that you won’t be responsible for back taxes and fees owed on a joint tax return that was not approved by you.

Requirements for Innocent Spouse Relief

In order for the IRS to grant innocent spouse relief, the following requirements must be met:

  • A joint income tax return for the year in question must have been filed with the IRS for the year in question; and,
  • Within that joint income tax return, an understatement of tax must have been made due to an error by your spouse.
  • You must request relief within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998.

Tax Court Representation

As a tax attorney that specializes in family law, Dale O'Neal can help you apply for innocent spouse tax relief and will provide representation in tax court if needed. We, literally, want to plead your case. We want to show the IRS your past, present and future with respect to your tax debt.

Our goal is to explain to them exactly who you are, what you have been through, and the travesty of your situation. We will submit the required paperwork and then advocate your defense through the most elaborate means possible which may include video depositions of you and any witnesses to your claim. Our concentration will be in the following areas, as applicable:

How much did you know, or should have known, about the level of income in your household and the filing of tax documents? When you signed the tax return that reflected an understatement of income, how much knowledge did you have? Partial relief may be available for the amount you did not know about.

Any and all spousal abuse that occurred during that tax filing year(s). Spousal abuse is a very broad term and includes physical, emotional, psychological, sexual, or abusive threats involving a third party (i.e. threats to injure a child, if you failed to sign the tax return);

Your tax paying history

Your legal obligation to pay the tax debt. You may not be legally obligated to pay if, during the tax year in question, you no longer owned the assets that generated the income, but your spouse did, as in the case of a divorce.

What significant benefit, if any, did you receive from the income being taxed?

What was the condition of your mental and physical health when you signed the tax return in question? Did you have the mental capacity to participate in fraud, or, the physical health required to actually question the tax documents in question?

Economic hardship that would be imposed upon you if your request is denied. Economic hardship can be shown by your providing 2 documents which you compile. The first, a simple income and expense worksheet. Income is usually determined by paychecks so attach copies of typical net paychecks you receive. As far as expenses, review cash receipts, checkbooks registers, credit card statements, etc. and divide your expenses into categories such as food, clothing, housing, transportation, utilities, insurance, debt repayment, education and other recurring usual monthly expenses. The second, a financial statement listing all of your outstanding financial obligations – mortgage, car loans, student loans, debts of any kind.

Lastly, whether or not your former spouse committed adultery during the marriage. Although not a legal factor, the IRS takes this into consideration along with the assumption of money being expended.

Other Types of Tax Relief

If you don't qualify for classic innocent spouse relief, you may qualify for one of these other provisions:

Separation of Liability

This type of relief basically amends a joint return into separate ones by allocating the income and deductions from the joint return to each spouse.

Equitable Relief

To qualify for this relief, an individual must have an unpaid amount of understated or underpaid tax and must not be eligible for relief under either of the two types of innocent spouse relief.

Injured Spouse Relief

In addition to the forms of relief mentioned above, the is Injured Spouse relief which usually occurs when a refund due (or a portion of a refund due) from a filed joint return was intercepted by the IRS as a result of one spouse’s tax filings prior to the marriage. The logic is that the Innocent Spouse cannot be legally liable for tax returns and ensuing liabilities that occurred prior to the marriage.

Don't delay, call tax attorney Dale O'Neal at 817-877-5995 now or request a consultation online to get started today.