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How Do You Qualify For Innocent Spouse Relief?

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Let’s say you’re married and you file a “married filing jointly” return, to take advantage of the unique tax benefits offered by this particular filing status. You have a regular “day job” where your employer takes out your taxes every pay-check and gives you a W-2 at the end of the year. The two of you decide to take a weekend just to sort through all of the paperwork and get a grip on the tax situation with his business. After muddling through the records as best you can, and deducting expenses, you determine that he owes taxes on $48,500 of taxable income. Therefore you determine that he owes a tax of $7475. That’s when he “drops the bomb” that he hasn’t been getting enough money aside to pay the taxes. “By requesting innocent spouse relief, you can be relieved of responsibility for paying tax, interest, and penalties if your spouse (or former spouse) improperly reported items or omitted items on your tax return. Generally, the tax, interest, and penalties that qualify for relief can only be collected from your spouse (or former spouse). You must meet all of the following conditions to qualify for innocent spouse relief:

  • You filed a joint return which has an understatement of tax due to erroneous items of your spouse (or former spouse).
  • You establish that at the time you signed the joint return you did not know, and had no reason to know, that there was an understatement of tax.
  • Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understatement of tax.

Erroneous items are either of the following:

  • Unreported income. This is any gross income item received by your spouse (or former spouse) that is not reported.
  • Incorrect deduction, credit, or basis. This is any improper deduction, credit, or property basis claimed by your spouse (or former spouse).”

If you find yourself in a situation where the actions of a spouse have invited unexpected trouble into your life from the IRS, you may need legal representation to deal with them.

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