Are You an Innocent Spouse?

If you have been asked to pay for the tax bill of a spouse or former spouse, you may be wondering if you are an “innocent spouse”. To determine whether you qualify as an innocent spouse, there are seven important things to consider.

1. Tax Liability

First, you will need to determine whether you are actually responsible for the tax bill. This can be accomplished by reviewing any joint tax returns and all relevant financial documents. If you were unaware of any underreported income or other errors on the return at the time it was filed, such as your spouse claiming deductions or credits that were not legally allowed, you have a strong argument that you are an innocent spouse.

2. Separate Liabilities

It’s important to remember that regardless of whether you filed a joint return or separate returns, if any tax liabilities were incurred during the marriage, they will be presumed to be joint and several liabilities. This means both parties may be held liable for the debt.

3. Community Property States

If you live in a community property state, such as California, Texas or Arizona, it’s important to understand that any taxes incurred during the marriage are presumed to be joint and several liabilities. However, if you entered into an agreement with your spouse before the return was filed that states the liability should belong to one spouse, then you may be able to claim innocent spouse relief.

4. Timing of Claim for Relief

You must file your claim for relief with the IRS within two years from the date that the IRS first contacted you regarding the tax liabilities in question. However, there are some exceptions to this rule so it’s important to check with your tax professional if you are unsure.

5. Time Limit on Collection of Tax Debt

The IRS has a 10-year statute of limitations on the collection of taxes, so even if you don’t qualify as an innocent spouse now, you may still be able to have the tax debt discharged in the future.

6. Collection Alternatives

The IRS offers several collection alternatives to help taxpayers pay off their tax liabilities, such as an installment agreement or an offer in compromise. Talk to your tax professional about which collection alternative may be right for you.

7. Professional Advice is Recommended

Given the complex nature of innocent spouse relief, it is important to seek professional advice from a tax professional. They will be able to guide you through the process and help you determine whether or not you qualify for relief.

If you think that you may be an innocent spouse, it is important to take action as soon as possible. The sooner you file your claim for relief, the sooner you can have peace of mind knowing your tax debt is being taken care of.

By understanding the seven things to consider if you think you are an innocent spouse, you will be better prepared to handle your situation and take the necessary steps to protect yourself from any potential tax liability. Seek professional advice from a tax professional if you have any questions or concerns. They can assist you in making the best decision for your financial future. Good luck!