Married taxpayers file a joint tax return because of benefits this filing status allows them, but these benefits come with risk, a significant risk. When filing jointly, both taxpayers are jointly and severally liable for the tax and any additions to tax, interest, or penalties that arise from the joint return, even if they later divorce. Joint and several liability means that each taxpayer is legally responsible for the entire liability. Thus, both spouses on a joint return are generally held responsible for all tax due even if one spouse earned all the income or claimed improper deductions or credits. This is also true even if a divorce decree provides that a former spouse will be responsible for any amounts due on previously filed joint returns. In some cases, however, a spouse can get relief from joint and several liability.
These provisions providing for relief from joint and several Federal income tax liability are extremely important, but are likewise very factually and legally complicated. As such they require skilled legal counsel to properly present to the IRS. Our Law Offices will ensure your request for Innocent Spouse, Separation of Liability or Equitable Relief from joint and several liability are properly presented so that you gain the relief offdered by these provisions.
There are three important types of relief from joint and several liability of a joint return:
You must request innocent spouse relief or separation of liability relief no later than 2 years after the date the IRS first attempted to collect the tax from you. For equitable relief, you must request relief during the period of time the IRS can collect the tax from you. If you’re looking for a refund of tax you paid, then you must request it within the statutory period for seeking a refund, which is generally three years after the date the return is filed or two years following the payment of the tax, whichever is later. Refunds aren’t available under separation of liability relief.
Innocent Spouse Relief
You must meet all of the following conditions to qualify for innocent spouse relief:
Separation of Liability Relief
To qualify for separation of liability relief, you must have filed a joint return and must meet one of the following requirements at the time you request relief:
But, if you had actual knowledge of the item that gave rise to the understatement of tax at the time you signed the joint return, you don’t qualify for separation of liability relief.
If you don’t qualify for innocent spouse relief or separation of liability relief, you may still qualify for equitable relief. To qualify for equitable relief, you must establish that under all the facts and circumstances, it would be unfair to hold you liable for the understatement or underpayment of tax and other requirements listed in Publication 971, Innocent Spouse Relief.