Free Yourself From Your Spouse’s Tax Debts

When people marry, they build more than romantic and personal relationships. The process of marriage itself creates legal ties. These may also lead to financial ties to each other. You may consequently find yourself liable for the tax debts of your ex for returns filed together. Returns previously filed may later result in tax-related issues with the relevant authorities that hold you jointly liable. Hiring an experienced tax attorney can help you secure innocent spouse relief.

What Is Innocent Spouse Relief?

Innocent spouse relief allows the party who believes he or she is not liable to seek to be free from an ex’s or partner’s tax debts. Innocent spouse relief typically applies to cases where couples are still together. The IRS generally refers to instances that include death, divorce, or separation as separation of liability relief. 

Regardless of the couple’s current marital status, the problem arises when one or both parties commit errors on a jointly filed tax return that later comes to light. The most common problem is the understatement of total income or taxable income.

How Does This Differ From Injured Spouse Relief?

You are an injured spouse if you lose all or a portion of your tax refund to cover your partner’s or ex’s debts from a separate case, not reflected on the return. The tax ID included in the field return may trigger this once submitted and processed. Because injured spouse cases relate to separate issues tied to one spouse, it is often much easier to seek relief, compared to innocent spouse cases.

Forbes states that the following debts owed by your spouse could cause you to lose your tax refund:

• Unpaid, past-due federal tax balances
• Unpaid, past-due federal student loans
• Back spousal support
• Back child support

What Are the Criteria for Innocent Spouse Relief?

When deciding who qualifies for this type of relief, the IRS puts three criteria in place. Alleged innocent spouses must meet all three criteria to successfully proceed:

• You filed a joint return that included an error you believe is the fault of only your spouse or ex.
• You can prove that at the time you signed the return, you were unaware of the error and had no reason to know one existed.
• After considering all the details present in the case, it would be unfair for the IRS to hold you accountable.

What Are Some Signs of Unfairness for the Innocent Spouse?

The IRS considers several factors when determining whether it is fair to hold you liable for the debt. These are the main ones to keep in mind:

• Whether you received certain benefits for the understatement, which could be either direct or indirect
• If you received any benefits at all, related to the understatement on the return
• If you and your spouse or ex have since separated or divorced
• Whether your spouse or ex has since deserted you

What Is the Process for Seeking Innocent Spouse Relief?

Taxpayers have only two years to apply for relief after the IRS begins collection proceedings. In the unfortunate circumstances that you are unable to prove innocence, you may become liable for paying, so it is important to act swiftly. This is because debts accrue interests and penalties the longer they remain unpaid.

If you and your spouse are no longer together, this can complicate things. Death, serving overseas, and other situations can also create complex situations. An experienced attorney can review the situation to see what your particular options are, along with these general steps to follow.

1. Talk to Your Spouse

If you can communicate with your spouse or ex, it is often in your best interest to do so. In the best-case scenario, he or she may choose to personally handle the debt. However, if he or she feels spiteful, lacks the financial resources, or disagrees on who is liable for the tax debt, talking may not resolve the issue. 

2. Hire Professionals

If you have access to all the financial documents for that tax year, a financial professional can do investigative work on your behalf. The bigger the tax liability, the more likely it is that you may need to work with an accountant. A tax lawyer can also help you determine what your options are based on the outcome of this investigation.

3. File the IRS Form 8857

Even if your chances of receiving innocent spouse relief are slim, your attorney may still encourage you to apply. This requires accurate completion of Form 8857. Taxpayers can use this form whether they are still married or not. Note that the IRS notifies the spouse or ex of your request for relief.

4. Await Judgment

The tax court must decide on whether you should be granted relief. The court also determines the extent of the relief. It may or may not determine that a portion of the liability does belong to you.

Why Work With an Experienced Local Attorney

The IRS is an adversary no one wants to go up against it. It has the authority to take actions that private creditors only dream of. When debts continue to go unpaid, it may decide to use these to its advantage. Some common actions it may take include placing a lien on assets, visiting your home, asking family members about your financial situation or revoking your passport. It may also choose to pocket refunds and some government benefits you would have otherwise received.

An experienced attorney can review your situation and determine all possible relief options. Even if you do not qualify for innocent tax relief, there are other tax relief programs you may consider. For instance, your attorney may recommend an offer in compromise or a repayment plan. Until you pick up the phone and speak with a qualified professional, though, you may never know all the options available to you.

Finding an experienced tax attorney who is committed to leaving no stone unturned is not always easy. We simplify the process by connecting you with qualified local professionals. Submit a request online or call us today at (866) 345-6784 to get in touch with an attorney in your area!

About the Author

Aaron is a professional legal writer with a B.S. in English Education from Southern Illinois University – Carbondale. He has written, published, and edited thousands of legal articles for RequestLegalHelp, which has connected over 5 million people to legal help in the United States.

With over five years of experience writing thousands of legal articles for law firms across the U.S. and Canada, Aaron specializes in covering federal, state, and city-level legal issues ranging from auto accidents to wrongful terminations. Contact Aaron at [email protected] for article suggestions, collaborations, or inquiries.