If you find yourself in a detrimental tax situation because of your spouse, there’s help. Innocent Spouse allows taxpayers to seek relief from penalties resulting from underpayment of taxes by a spouse. In other words, if your spouse isn’t telling you the entire truth about your tax situation, there’s help. You should not be held liable for a tax mess that your spouse got you into. This is especially true if you’re now divorced, or living separately. Through the Innocent Spouse tax relief program, we can help you become tax-free. In other words, if you’re not at fault, you shouldn’t be liable for consequences. Our tax relief services programs can help you get out of tax debt for good. Call the tax resolution services experts at FinishLine Tax Solutions if you’re in tax trouble because of your spouse.
What is the Innocent Spouse Rule?
You can avoid tax penalties that result from errors made by a spouse on a joint tax return. For example, if your spouse or former spouse failed to report income, you can seek relief. Furthermore, if your spouse or former spouse reported income improperly, you can seek relief. Lastly, if your spouse claimed improper deductions or credits, you can seek relief. Tax problems are hard enough on your own. The last thing you want is to deal with tax problems that belong to your spouse or former spouse. Dealing with a divorce or separation is already hard enough. Don’t let tax problems make the situation even harder. Give us a call at FinishLine Tax Solutions and we’ll help you get the relief you need.
Who is Eligible for Innocent Spouse Relief?
If you’re in tax trouble because of your spouse or former spouse, there are tax relief services for you. However, not everyone will be eligible for Innocent Spouse Relief. Call the professionals at FinishLine Tax Solutions to see if you qualify. In the meantime, here are a few requirements to be eligible for Innocent Spouse tax relief.
- First, you must have filed a joint return with your spouse or former spouse. This return most displays the error in income reported and it must relate directly to your spouse.
- Second, you must have no knowledge of the error reported by your spouse or former spouse.
- Third, once you identify the error, the IRS must agree you should be relieved of responsibility for that error.
- Lastly, you must apply for relief within two years of the IRS initiating collection.
Can I apply for Innocent Spouse relief if I’m no longer married?
To apply for Innocent Spouse relief, taxpayers need to file IRS form 8857. However, if you are no longer married you can still apply for the separates election liability. In other words, you can still get similar relief if you aren’t married. However, this rule requires that you must no longer be married due either to divorce or death. Furthermore, a judge may determine that you are still to be held liable under this provision. For that reason, it’s beneficial to speak with a tax resolution services professional before applying for innocent spouse relief.
What if I didn’t know about my spouse’s taxes?
There is a “lack of knowledge” clause for innocent spouse relief. In other words, it’s possible to claim this tax relief if you weren’t aware of your spouse’s tax filing error. However, this clause can be problematic. In other words, the court may insist that you should have known about the error. Even if you claim you didn’t, a judge may still insist you should have. If you are considering applying for innocent spouse tax relief, speak with a tax resolution expert. A professional is the only one who can truly help you understand your case.
Additionally, a tax relief expert can help you negotiate with the IRS. Sometimes, speaking with the IRS about your individual situation can mean a world of difference. At the end of the day, the IRS just wants to get the money you owe them. And they’ll take whatever aggressive measures they need to get it.
Partial Innocent Spouse Relief
Additionally, if you claim you didn’t know about a portion of the mistake, you may qualify for partial tax relief. In other words, the IRS will relieve you of the portion of the tax understatement that you were unaware of.
Examples of Partial Relief Cases
Let’s say you knew that your spouse did not report $10,000 of gambling earnings on their taxes. However, it turns out that your spouse’s winnings were actually $40,000. In this case, you would only be held liable for the $10,000. This is because you claim you did not know the actual number was $40,00. In other words, the balance you were unaware of—$30,000—will qualify for Innocent Spouse Relief. However, the $10,000 you knew of will not qualify for Innocent Spouse Relief.
Can the IRS Deny me of Innocent Spouse Relief?
It’s possible that the IRS can deny your innocent spouse tax resolution service relief. There are two cases specifically where the IRS may deny your innocent spouse relief request:
- If you knew of the understatement
- Or, if a person in your same circumstance would have known of the understatement.
What if I knew about the error my spouse made?
If you knew of the tax filing error your spouse made, you’ll likely not qualify for innocent spouse relief. In other words, if you’re fully aware of the error, you do not qualify. In this case, you and your spouse, or former spouse, will be liable for the error.
What qualifies as a “reason to know” of the tax filing error?
The IRS may also deny your innocent spouse relief request if you had a valid reason to know of the error. In other words, if you had reason to know about the error, innocent spouse relief doesn’t apply to you. Furthermore, both you and your spouse, or former spouse, will still be held liable for the tax payment.
What qualifies as “reason to know”?
- The IRS considers the following facts and circumstances as “reason to know.”
- First, if the nature and amount of the error are related to other items reported on your returns.
- Second, the financial situation of you and your spouse, or former spouse.
- Third, your educational background and business experience.
- Fourth, your involvement in the activity that led to the mistake.
- Fifth, if you failed to ask your spouse or former spouse about the item. Additionally, this would need to be a question that a reasonable person would ask.
- Lastly, if the mistake was a departure from a recurring pattern in previous years’ returns.
Other types of Tax Relief for Spouses
There are additional tax relief services for spouses. Other types of tax resolution services for spouses include:
- Relief by Separation of Liability. In this case, you divide the understatement of tax between you and your spouse. Furthermore, the total must include interest and penalties.
- Equitable Relief. In this case, you may be eligible for relief of tax, interest, and penalties. Furthermore, you should apply for Equitable Relief you do not qualify for the other two tax resolution services.
FinishLine Tax Solutions has helped thousands of clients get Innocent Spouse tax relief. We understand that tax situations are not always your fault. In other words, don’t take the blame for someone else’s errors. We understand and we’re here to help. Call us today for a free consultation.
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