Innocent Spouse Relief

Innocent Spouse ReliefWhen a married couple files a joint tax return, the resulting tax owed is a joint and several liability which means that each person is individually liable for the full amount due to the IRS. Fortunately, however, the IRS recognizes certain common circumstances in which one spouse should not be held liable for the tax liability of the other spouse. Such claims are are presented to the IRS using the “innocent spouse relief” defense. The Tax Resolution Lawyers at Vincent W. Davis and Associates can evaluate your situation to determine if you qualify for innocent spouse relief.

“For Better or Worse” —Really!#%?

When most brides and grooms say: “For better or for worse,” they probably thought of a lay-off or hospital stay – but not being the victim of tax incompetence or actual tax fraud perpetrated by a current or former spouse.

95% of Married Couples File “Joint Tax Returns…”

IRS statistics back in 2007 tell us that 54 million tax returns were filed listing the “married – filing jointly” status compared with only 2.7 million returns with “married – filing separately” status. That means that a little over 1 million of 26 million “couples” decided to keep their tax filings separate.

Why Married Couples File Joint Returns

Tax Incentives! Married couples tend to file joint tax returns because it allows the couples to take advantage of tax credits, tax incentives, and other benefits available only to married, joint filers. One unfortunate potential drawback is that each spouse is each responsible —jointly and individually— for any taxes, interest and penalties due on returns filed while they were married. A later divorce does not, in any way, shield them from that liability. If you file jointly, the liability is “joint and several,” meaning that the IRS can come after either spouse for 100% of the debt.

How severe could the consequences be? A stay-at-home mom and homemaker could be held responsible for all tax liabilities owing from her spouses income — though he was solely-responsible for the entire income for that tax year.

By filing a joint return, you pay income tax as one person, even if your spouse earned 100% of the income, the income tax liability is joint. If your spouse dies, divorces you, purposefully disappears leaving you to face the consequences you are still liable for paying any taxes unless you are able to persuade the IRS that you are the “Innocent Spouse.” Even if the IRS agrees with your argument, they do not have to waive the tax liability. It pays to have competent and experienced legal help when dealing with an agency this big and powerful.

What can I do if my Spouse or ex-Spouse is the Problem?

If your current spouse or your ex-spouse —either unintentionally or deliberately— under-reported income, overstated deductions, or is responsible for other IRS violations, the “good spouse” (the innocent spouse) is just as liable and will be held accountable by the IRS for satisfying any outstanding tax obligations. Unfair? Certainly. What can you do about it? Speak up for yourself and make a case to the IRS, through an approved procedure, why you are the victim of your spouse and should not be held equally-liable for the tax debt.

Every year it is estimated that 50,000 individuals file for “Innocent Spouse Relief” with the IRS. Unfortunately, without some professional help, it can be very difficult to prove your case and many petitions are denied. That doesn’t mean you should not try. In fact, those who involve a tax lawyer have a far greater chance of getting ones’ filing taken more seriously with a far-better chance for a favorable result. Innocent Spouse Relief is a form of tax relief that can completely or significantly relieve you of your tax liabilities, interest and penalties as a result of filing a joint tax return with your current or ex-spouse.

News Update – As of July 2011, the IRS has eliminated a requirement that would disqualify taxpayers from innocent-spouse status if they fail to file for Innocent Spouse Relief within two years. Until the 2011 change, the IRS denied applicants who missed its deadline of two years after the first collection notices were sent to taxpayers by the agency. Unfortunately most taxpayers were not aware of the 2-year rule, and did not even know they were facing a tax issue because, in many instances, they never saw the IRS notices as the spouse who caused the tax issue kept the notices and the tax obligations hidden, or the innocent spouse feared a spouse’s reaction should they consider contesting their part in the creation of the tax mess.

There are three categories of relief you may seek…

…for spouses who filed joint returns:

Innocent Spouse Relief – can relieve you of all responsibility for paying tax, interest and penalties if you can prove your spouse made mistakes or even failed to report income, reported income improperly, or claimed improper deductions or credits. This is the most difficult of the three levels to attain because you must prove to the IRS that at the time you did not know, and had no reason to know, that your spouse made legitimate mistakes or intentionally underpaid taxes. A competent tax lawyer will have the experience you need to make your case or appeal a denial if you have attempted this on your own

Separation of Liability Relief – is where the IRS simply allows you to pay the portion of taxes which you are responsible for and then goes after your spouse for his or her understated tax liability, interest and penalties.

Equitable Relief – If you cannot prove eligibility for “Innocent Spouse Relief” or “Separation of Liability Relief” for something not properly reported on your joint tax return, you may qualify for equitable relief if the correct amount of tax was reported on your joint return but the tax remains unpaid.Under “Equitable Relief,” the IRS will often give more leeway when it is difficult to prove you are the innocent spouse.

Innocent Spouse and Injured Spouse Links:

  • Publication 555, Community Property (PDF)
  • Instructions for Form 8379, Injured Spouse Allocation (PDF)
  • Form 8857, Request for Innocent Spouse Relief (PDF)
  • Instructions for Form 8857, Request for Innocent Spouse Relief (PDF)
  • Publication 971, Innocent Spouse Relief (PDF)

You Need Innocent Spouse Relief if Your Ex is in IRS Trouble

Get some help —Make that call!

The Tax Resolution Lawyers at Vincent W. Davis & Associates, provide a no-obligation, confidential consultation and have appointments available for evenings and weekends. Moreover, we accept all major credit cards and can make other payment arrangements so that we can help you get your tax problems straightened out without adding additional layers of financial burden on you and your family. We have seven convenient offices throughout Southern California, including Los Angeles County, Orange County, Riverside County and San Bernardino County. To schedule a confidential consultation with one of our Tax Resolution Lawyers, call 626-446-6442.

Arcadia Office
150 N. Santa Anita Ave,
Suite 200
Arcadia, CA 91006
Phone: (626) 446-6442
Fax: (626)-446-6454

Beverly Hills Office
9465 Wilshire Blvd.
Suite 300
Beverly Hills, CA 90212
Phone: (310)-880-5733

La Mirada Office
Cerritos Towne Center
17777 Center Court Drive ,
Suite 600
Cerritos, California, 90703
Phone: 888-888-6542

Los Angeles Office
Gas Company Tower
555 West Fifth Street,
31st Floor
Los Angeles, California, 90013
Phone: (213)-400-4132

Long Beach Office
Landmark Square
111 West Ocean Blvd.,
Suite 400
Long beach, California, 90802

Irvine Office
Oracle Tower
17901 Von Karman Avenue,
Suite 600
Irvine, California, 92614
Phone: (949)-203-3971
Fax: (949)-203-3972

Ontario Office
Lakeshore Center
3281 E. Guasti Road,
7th Floor
City of Ontario, California, 91761

Riverside Office
Turner Riverwalk
11801 Pierce Street,
Suite 200
Riverside, California, 92505
Phone: (909)-996-5644

San Diego
Emerald Plaza
402 West Broadway,
Suite #400
San Diego, California, 92101
Phone: (619)-885-2070

Aliso Viejo
Ladera Corporate Terrace
999 Corporate Drive,
Suite 100
Ladera Ranch, California, 92694
Phone: (714) 721-3822