Do you have any liability as the spouse of someone who has a tax debt? What if you are going through a divorce and technically the debt is your spouse’s.
Here’s the answer to these questions. If, you filed joint returns with your spouse during your marriage and you both signed the returns you filed every year, you both share equally in the tax responsibility that was accrued during the marriage. It is a tough area to get relief from the IRS and only one instance where the IRS feels this may be a legitimate defense. This defense is called Innocent Spouse. Just know that it is hard to get this approved and there are several criteria you will have to meet.
Here they are:
- You have filed a joint return.
- The Tax Debt has to be DIRECTLY linked to only your spouse.
- You have to prove you had no idea what your spouse was doing with the return once you signed it
- This has to be claimed within two years of the IRS taking action against you.
- Your best chance is to be legally separated or divorced for at least a year prior to making your Innocent Spouse Claim.
And again there are three types of Innocent Spouse Claims. You will have to decide which one is best for your claim.
Classic Innocent Spouse: You are saying that you did not know your spouse was not paying your taxes. Ignorance!
Separate Liability Election: During your marriage you had the proper deductions taken out of your paychecks. Even though you may have filed jointly with your spouse, you will have to re-file separately and prove the following:
- That you did file a joint return
- The return in question did contain an underestimated tax
- You have been separated from your spouse for a minimum of 12 months and has been under two years since the IRS took action against you.
Equitable Relief: This is where you absolutely had no idea what was going on. You didn’t help with finances at all. You didn’t have a hand in running the family business. You just signed a return and assumed everything was being taken care of. The qualifications are:
- You must have filed a joint return
- You are unable to obtain relief under Classic Spouse Relief or Separate Liability
- No more than two years have passed since the IRS took action against you
- You have to prove that no fraudulent asset transfer has taken place between you and your spouse
- You have to prove that you or your spouse hasn’t transferred property to avoid paying the taxes due
- You have to prove that it is unfair to hold you liable for your spouse’s tax bill