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IRS And The Innocent Spouse

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At times, married taxpaying couples can receive certain benefits by filing jointly. According to the Internal Revenue Service, in this situation, both taxpayers are jointly and individually held accountable for the tax and any interest or penalty that may be due on the joint return. This is also the case if a divorce occurs at a later date, or if the income that was taxed was earned by only one person, or errors were made on the joint tax return.

In certain circumstances, a spouse may be held accountable for all of the tax that is due. There are three different types of relief available for those that may face this particular situation. They include innocent spouse relief, relief by separation of liability, and equitable relief. Each relate directly to the innocent spouse.

One must file Form 8857 in order for the Internal Revenue Service to determine the taxes for which one is responsible. Form 8857 is used by the IRS to determine if a person qualifies for any of the types of relief available.

There are several conditions that one must meet to qualify for innocent spouse relief. According to the Internal Revenue Service, you must file a joint tax return which understated the amount of tax due to errors made by your spouse or former spouse. Also, you must not have reason to know there was an understatement of tax on the joint tax return, and given the facts, it would be unfair to be held accountable for the understatement of tax. The spouse not requesting relief will be notified about the request so that they have an opportunity to participate. The non requesting spouse has no appeal rights to the claim unless they file one of their own.

There are two other forms of relief: separation of liability and equitable relief. According to the IRS, separation relief simply allocates the understatement of taxes between a person and their spouse, or former spouse. Typically, the amount allocated to each individual is the amount in which they each are responsible. To qualify for separation relief, a person must be legally separated from his or her spouse. Also, the person cannot have been a member of the same household as the spouse during one year, ending on the date you that file the Form 8857. The individual must also be able to prove that they met all of the requirements for separation of liability, and that they did not transfer property to avoid paying taxes.

Equitable relief may be given under certain circumstances. Unlike the other forms of relief granted by the IRS, one can get equitable relief from either an understatement of tax or an underpayment of tax. An individual can also receive relief of a tax return that was filled appropriately, but the entire tax amount was not paid. According to the IRS, you cannot be eligible for any other type of relief to receive equitable relief. The IRS views equitable relief with a critical eye to avoid the success of fraudulently filed claims.

Tax issues can threaten a person's financial state and freedom. A tax attorney can not only mount an effective defense, but also a very thorough offense to most any tax issue. It is therefore very important that the tax attorney is consulted for any regular or unforeseen tax situation. The United States tax laws are very complex, and their interpretation requires an intimate knowledge and the skill to use it. A tax attorney works for the benefit of their client, and can provide preventative information to avoid future trouble with taxes.