Communication issues can be problematic in a marriage. They can lead to confusion, misunderstanding, hurt, and even divorce. But poor communication can also lead to serious financial implications, such an unexpected tax liability and allegations of tax fraud. This is because while many couples file their taxes jointly, usually one spouse handles preparing the return. Also, in many instances, one spouse simply misrepresents or lies about information being entered onto a tax form, and the other spouse doesn’t know it until the IRS comes knocking at their door seeking additional taxes, interest, and enormous penalties.
Fortunately, those spouses who have done nothing wrong might be able to escape being held accountable for their husband or wife’s misdeeds. This is most often accomplished by seeking what is known as innocent spouse relief. If successful in seeking this type of relief, a spouse is legally relieved of the obligation to pay outstanding taxes, interest, and penalties. Instead, that burden will fall solely on the other spouse.
How you can get the relief
So how do you obtain innocent spouse relief? You must prove that you meet certain requirements. Amongst those requirements are that you didn’t know and didn’t have reason to know that the reported taxes due on your joint return was understated and that it would be unfair to hold you liable for them. While this might sound straightforward, these can actually be tricky requirements to meet.
Determining whether relief is fair, for example, will drive the IRS to consider a number of things. They will look to see if you derived any benefit from the understatement, either directly or indirectly, as well as the current relationship between you and your spouse. They will also look to see if you had actual knowledge or should have known of the understatement. In other words, the IRS wants to know that you didn’t actively participate in or simply turn a blind eye away from an erroneous tax filing.
Dealing with tax matters like these can be stressful, and the implications can be life-changing. Fortunately, you don’t have to face these matters alone. A competent tax law attorney can help guide you through the process so that you can hopefully obtain a favorable outcome and move on with your life without an enormous tax burden hanging over your head.
