Law Offices of Maryam M. Golbarg, P.C.
Your Tax Relief Attorney
Tax Solutions
Innocent Spouse Relief
“Innocent” spouse relief should not be confused with “injured” spouse relief.
When filing a tax return jointly, as so many married couples do, both spouses are jointly and severally liable (equally responsible for the entire tax liability) for the tax reflected on the joint tax return, any additions to tax in the event of an audit, and penalties and interest that arise from the joint tax return (even if the spouses later get divorced, separated, or even if one of them passes away). The spouses are jointly and severally liable even when one spouse has earned all the income and claimed improper deductions or credits and is solely responsible for the underreporting of the income.
The classic innocent spouse case is when one of the spouses is self-employed and does not report all of his or her income on the joint tax return, while the other spouse is unaware of this unreported income and did not benefit from this unreported income. The IRS later examines the joint tax return and assesses additional tax liability and attempts to collect from both spouses even if the couple has been divorced or separated or even if the spouse who did not report all of his/her income has passed away.
Innocent spouse relief only applies to individual income or self-employment taxes. Business taxes and trust fund recovery penalty for employment taxes are not eligible for innocent spouse relief.
conditions to qualify for Innocent Spouse Relief?
To qualify for innocent spouse relief, one must meet all of the following conditions:
- The understated tax was reported on a joint tax return;
- The understated tax solely attributes to under-reported income or improperly applied deductions, credits, or cost basis by the spouse;
- At the time of signing the joint tax return, the innocent spouse did not know or had no reason to know that the understated tax existed;
- Neither of the spouses or former spouses have transferred property to one another as part of a fraudulent scheme;
- Considering all the facts and circumstances, it would be unfair to hold the spouse liable for understatement of tax.
If you request innocent spouse relief, the IRS is required to notify your spouse that you filed jointly with of your request and allow him or her to provide information for consideration regarding your claim.
When a person requests for “innocent spouse relief”, he or she can be relieved of responsibility for the additional tax, penalties and interest in the event that the other spouse or ex-spouse is solely responsible for the additional taxes, penalties and interest resulting from improperly reported income or omitted items on a joint return.
We have successfully negotiated innocent spouse relief cases with the IRS, and we can do the same for you. Call us to find out if you are qualified for this kind of relief and what needs to be done next.
