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Video instructions and help with filling out and completing Innocent spouse relief vs injured spouse
Instructions and Help about Innocent spouse relief vs injured spouse
If you and your spouse filed a joint tax return the general rule is that you're both 100% liable for any additional taxes that are assessed this means the IRS can place leaves on your property levy your assets or even garnish your wages however if the understatement of tax is attributable only to your spouse's wrongdoing and not your own then you may qualify for innocent spouse relief the first requirement is that you must have filed a joint tax return that has an understatement of tax also known as a tax deficiency which is solely caused by your spouse's erroneous item an erroneous item could be income that was received by your spouse and not reported on the return or it could be a credit or deduction that was improperly claimed by your spouse on the return second you must establish that at the time you sign the return you didn't know or have any reason to know that there was an understatement of tax on the return the last requirement is that when taking all the facts and circumstances into consideration it would be unfair to hold you liable for the understatement of tax as an example I worked on a case where a client and his wife got divorced in 2022 right after the divorce she started taking withdrawals from her 401 K when April 2022 came around they decided to go ahead and file jointly for the previous tax year well my clients signed the return he had no idea that his former wife had taken these withdrawals from her 401 K so they were not reported on the return and he signed it he came for a firm and we requested innocent spouse relief since the deficiency was called solely by his wife's 401 K withdrawals and he had no reason to know about those when he signed the return he was relieved of all liability if you qualify for innocent spouse relief you're totally off the hook for any tax liabilities and any resulting interest in penalty however if you and the spouse have any community property the IRS could still come after the spouses portion of that community property I represented a client whose husband owed a bunch of taxes and the IRS is trying to force a sale of their home so that they could collect half of the proceeds representing his half interest in the community property if this for sale had gone through our client would have received half of the proceeds and the government would have received the other half fortunately we were able to negotiate a fair agreement with the government to avoid a forced sale if there was an understatement on your joint tax return that was caused by your spouse and you had no reason about the understatement when you sign the return you should consult with an attorney to see if you might be eligible for innocent spouse relief.