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Innocent Spouse Relief

Separation and divorce can be made even more difficult when an IRS debt is involved. Some spouses find out long after a marriage ends that they owe a joint tax debt with their former husband or wife. This shock is often compounded by the number of high-pressure notices they receive from the IRS. Those individuals who are aware of a tax liability during a divorce often try to obtain a judgment from a court regarding who will be held responsible; this ruling, however, means little to the IRS.

innocent spouse reliefThe reality is a divorce decree can’t protect either spouse from collection efforts. The IRS is tasked with collecting the tax debt from either husband or wife. There is, however, a resolution option known as Innocent Spouse Relief offered by the IRS which absolves a spouse of personal liability. There are several eligibility requirements that have to be met in order to qualify for Innocent Spouse Relief. Fortunately, the IRS has set up an easy, guided questionnaire to help people find out if they qualify for innocent spouse relief.

Those who are eligible for Innocent Spouse Relief can file for it by sending in Form 8857 along with a detailed statement explaining why they qualify. In addition to filing these two documents, the IRS may require more paperwork and proof of eligibility. Depending on the complexity of the situation, it may be in a person’s best interest to get assistances from a licensed tax profession in dealing with the IRS.

Innocent Spouse Relief is not the only avenue to explore for those attempting to relieve the burden of a joint tax debt. There is also Separation of Liability Relief and Equitable Relief. Separation of Liability Relief allocates the understatement of taxes owed from an incorrectly filed tax return based on individual spousal responsibility. So, the bulk of the debt would go to the spouse or former spouse who has the greater understatement of taxes owed on their individual income.

Equitable Relief may be an option for those who do not qualify for Innocent Spouse Relief or Separation of Liability Relief. Equitable Relief applies to situations where there is an understatement or underpayment of taxes owed on a return. In order to obtain Equitable Relief, a person must prove that he or she either had no knowledge of what led to the tax debt, or that he or she was being controlled by an abusive spouse.

As with Innocent Spouse Relief, the burden of proof lies on the taxpayer requesting assistance. Some individuals may also wish to seek help from a tax resolution company that has experience communicating with the IRS and filing for the various relief programs.