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Injured and Innocent Spouse

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What is Innocent Spouse Relief?

Many married taxpayers file a joint tax return because this filing status can reduce the amount of their taxes. In such a filing, the IRS holds the taxpayers "jointly and severally liable" for the tax, interest, or penalties that may accrue from the return, even after a divorce. Joint and several liability means that both taxpayers are responsible for paying the tax debt owed, regardless of their relative financial situations. In some cases, however, the IRS may grant a spouse relief from joint and several liability. This is called "innocent spouse relief."

How might I be eligible for Innocent Spouse Relief?

If you owe the IRS tax debt, interest, or penalties, and you believe that your spouse or former spouse failed to report income, reported income improperly, or claimed improper deductions or credits, you may apply for innocent spouse relief.

You must satisfy four qualifications to be eligible for innocent spouse relief:

  • You filed a joint tax return,
  • Your spouse (or former spouse) entered erroneous information on the return that led to an understated tax,
  • You can demonstrate that you were not aware of the erroneous information and that you had no reason to know that it led to the understated tax when you signed the return,
  • Considering all the circumstances relevant to the understated tax, it would unfair for the IRS to hold you liable for the understated tax debt.

The IRS may be more interested in evidence of deception on your spouse’s part more than simple ignorance on your part.

The IRS also may question whether you and your spouse transferred property to each other in a fraudulent scheme as part of their process for approving a request for innocent spouse relief.

Can innocent spouse relief only lessen the amount of tax, interest, or penalty owed, or can I apply for it to increase a refund?

Innocent spouse relief can apply to refunds due as well as tax, interest, or penalties owed.

Do I need an attorney to apply for Innocent Spouse Relief?

While private individuals may apply for innocent spouse relief, tax attorneys can provide valuable advice that may save you money if the IRS approves your application.

What is Injured Spouse Relief?

The IRS may consider you an "injured spouse" if they keep your refund in order to pay such outstanding debts owed by your spouse as past-due tax, child or spousal support, or student loans. The IRS calls the process of recovering your refund under such circumstances "injured spouse relief."

How might I be eligible for Injured Spouse Relief?

You may be eligible for injured spouse relief if you filed a joint tax return, and the IRS subsequently applied your tax refund to pay such outstanding debts owed by your spouse as past-due state or federal tax, child or spousal support, student loans, or debts owed to other federal agencies.

Do I need an attorney to apply for injured spouse relief?

While private individuals may apply for injured spouse relief, tax attorneys can provide valuable advice that may save you money if the IRS approves your application.

Can someone apply to get money back from past years under either the IRS innocent spouse of injured spouse programs?

For either the injured or innocent spouse programs, you must request relief no later than two years after the date the IRS first attempted to collect the tax from you.

If you are married when would someone want to make these claims?

If you are eligible for innocent or injured spouse relief, and being granted such would improve your financial situation, it would make sense to at least investigate this option further. Keep in mind, however that pointing the finger at your current spouse could represent one of those times when debt can cause relationship problems.

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