If your spouse improperly reported items or omitted items on your tax return, you may qualify for Innocent Spouse Relief. If you qualify, you may be relieved of the responsibility for paying taxes, interest, and penalties. Innocent Spouse Relief is available when the following is true:
- You filed a joint tax return with your spouse or former spouse which had an “understatement of tax” due to “erroneous items” reported by your spouse or former spouse;
- At the time you signed the joint tax return you did not know, and had no reason to know, that there was an understatement of tax due to erroneous item(s); and
- Taking into account all of the facts and circumstances, it would be unfair to hold you liable for the understatement of tax.
An “understatement of tax” occurs when a taxpayer reports less tax owed than should have been reported. Typical “erroneous items” include omissions of income, understatements of income, overstatements of deductions, inaccurate reporting of basis in property, and excessive claims of exemptions and credits.
Indications of unfairness considered by IRS are:
- Whether you received a significant benefit from the understatement of tax;
- Whether your spouse/ex-spouse abandoned you;
- Whether you and your spouse/ex-spouse have been divorced or legally separated; and
- Whether you received a benefit on the tax return from the understatement of tax.
To have your Innocent Spouse claim considered, you must file your request on a timely basis. There are thousands of different facts and circumstances under which the taxing authorities could determine that you are an Innocent Spouse. Therefore, it is important that you or your tax attorney obtain all your information concerning the circumstances surrounding your claim and artfully argue your case.