Like many married or formerly married couples in New York and elsewhere, you have or do file joint taxes. There are a lot of benefits to doing so. Unfortunately, this also means that the Internal Revenue Service can come after you for your spouse’s or former spouse’s tax liability.
Whether you’ve divorced or are still married, if you believe that the taxes the IRS says you owe really belong to your spouse or ex. you may not have to pay. For this to happen, it is necessary to file for something the IRS calls Innocent Spouse Relief.
How do I apply?
Applying is fairly straightforward. It requires filling out a form 8857 and submitting to the IRS with any supporting documentation within a certain time frame. While you typically have up to two years to file for Innocent Spouse Relief, some exceptions do apply and some individuals may have more time to file for relief. Even so, it is best not to wait too long to file such a request. The IRS recommends filing as soon as you know a tax liability exists.
Not everyone who thinks they qualify for Innocent Spouse Relief actually does. There are rules in place that are strictly followed in order to keep people from abusing the system. To qualify, you must meet the following conditions:
- The filing of a joint return occurred
- An understatement of tax exists due to your spouse’s error
- Proof that you were unaware of the issue
- Request for relief filed on time
If you choose to file for relief, the IRS has to notify your spouse or ex. This is standard procedure. He or she has the right to participate in the process and appeal the final decision if desired.
The IRS denied my request! Now what?
If the IRS denies your request for Innocent Spouse Relief, that doesn’t mean your case is closed. You have the right to appeal the decision or re-file if you have new supporting documentation that may help your case.
There is a lot more to joint tax liability and Innocent Spouse Relief than can be discussed in this forum. If you think this is something that may benefit you but are not entirely sure, it is okay to ask questions. An experienced tax law attorney would be able to review the finer details of your use and, if appropriate, help you seek the relief you desire.