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Innocent Spouse Relief

When filing tax returns, errors such as unreported income are common, which not only can trigger an audit but can result in additional taxes, penalties, and interest to each spouse if they filed jointly. But what if the unreported income was not your income, but rather, your spouses and you had no reason to know the return was filed with errors? Do you have any relief? You may qualify for relief of the additional tax burden under the Internal Revenue Service’s (IRS) Innocent Spouse Relief Program!

Who is eligible for Innocent Spouse Relief?

The Innocent Spouse Relief Program is designed for individuals who face tax liabilities resulting from a spouse’s erroneous or fraudulent actions. To qualify, you must meet specific criteria. First, you must have filed a joint tax return with your spouse that later resulted in unpaid taxes, interest, and penalties. Second, the unreported income must have been attributed to your spouse. Third, you must not have had any knowledge of, or reason to know about, the inaccurate reporting. If you can show this and successfully convince the IRS that holding you responsible for the unpaid taxes alongside your spouse would be inequitable, then you may qualify for the benefits of the Innocent Spouse Relief Program.

What Errors Receive Relief?

Relief under the Innocent Spouse Relief Program is granted to a wide array of tax-related errors. Often, these errors include understated or unreported income, taking deductions that one was not eligible to take, and incorrectly claiming credits. Additionally, the relief can cover errors that you were unaware of when you originally signed the joint return. In short, if your spouse committed the error without your knowledge, you may be eligible for relief.

How Do I Request Relief?

Applying for innocent spouse relief is a lengthy process that involves completing an application with substantiating documents and the IRS reaching out to your spouse to ask if they want to participate in the process. If you believe you qualify, relief can be requested by filing IRS Form 8857 – Request for Innocent Spouse Relief, which is a comprehensive form the IRS uses to gather information to determine the extent of the relief that should be provided. To avoid any pitfalls, many applicants seek the assistance of a qualified tax professional when completing their application. A tax attorney can assist you in not only applying for relief but can also help navigate the waters of your tax obligations if you are later faced with divorce or a legal separation.

If you believe you qualify for the Innocent Spouse Relief Program, the attorneys at Hone Maxwell LLP are here to help.

Disclaimer: Hone Maxwell LLP articles and blogs are not intended as legal advice. Additional facts, facts specific to your situation or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information herein.

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