As a couple, when you file a joint tax return, both spouses are generally responsible for any taxes that are due. But what happens when your spouse, or ex-spouse if you’ve gone through a divorce, did not file your tax return correctly? Not many people know this, but there’s a way to avoid paying additional taxes if your spouse, or ex-spouse, made glaring errors when filing your joint tax return. This is where innocent spouse relief comes into play. Let’s try to break down how this works and how you can take advantage of it.
What is Innocent Spouse Relief?
Innocent spouse relief is an IRS provision that provides tax relief to a spouse who did not know about or have any knowledge of, any tax understatements that were reported on the other spouse’s tax return. This type of tax relief is intended for spouses who were unaware of their spouse’s tax problems. For example, if the spouse hid financial information from the other spouse or did not ask about the tax return details, they can qualify for innocent spouse relief.
What Qualifies for Innocent Spouse Relief?
As good as it may sound, innocent spouse relief isn’t something you get automatically. You need to qualify for it first and accomplish the right form before the IRS considers giving you the tax break. To qualify, you must prove you didn’t know or had no reason to know that there was an understatement of tax liability on your joint tax return. To prove this, you will likely have to provide some documents to the IRS to prove that you:
- Had no financial ability to pay the taxes
- Did not have the assets to pay the taxes
- Did not have any knowledge of the understatement
- Did not benefit from the understatement
Bear in mind that the circumstances must be compelling, and you need to prove that you are genuinely innocent and unaware of the erroneous filing of your spouse. It’s also important to note that the errors must be clear and attributable to your spouse and not you.
How Can You Benefit from Innocent Spouse Relief?
If you qualify for innocent spouse relief, you may be able to claim a refund of your share of the tax or your share of the tax, interest, and penalties that were due with your tax return. You could also avoid paying any additional taxes if the IRS only allowed your spouse to claim a refund with your jointly filed tax return. If you did not file your tax return by the deadline, the IRS might still allow you to claim the refund, interest, and penalties.
What if You’re Not Eligible for Innocent Spouse Relief?
The innocent spouse relief is intended to help innocent spouses who find themselves in this situation. So if you don’t qualify, you won’t be entitled to claim innocent spouse relief. Luckily, there are several other tax relief options that may still be available to you. The IRS may allow you to amend your tax return and claim a refund if the IRS only allowed your spouse to claim a refund with your jointly filed tax return.
Innocent spouse relief was designed for people who were unaware of the tax mistakes that their spouses made when filing their joint tax returns. If you are an innocent spouse and want to file for innocent spouse relief, you may want to consult with a professional with experience in tax issues such as this. This way, you can be sure that you are properly handling the situation.
Don’t put yourself at the mercy of your tax problems. Whatever tax-related issues you have, there is always a solution to them, and you can utilize that solution effectively with the help of Axiom Tax Resolution Group. Our team believes that ignoring tax problems is a costly mistake. With our fresh start initiative, we’ll help you resolve your tax problems through our strategic tax relief solutions. Contact us today to get started!