Blog Post

If you’ve been following the last few blogs [Divorce and Taxes] and [Injured Spouse], you know that according to the IRS, there is a difference between claiming to be an ‘Innocent Spouse’ or an ‘Injured Spouse’. In this blog we return to the definition of Innocent Spouse, and give you some more details about how this request works and who might qualify.

Timelines

Whenever you are working with the IRS, knowing the timeline for each situation is crucial. In this case the timelines are specific to the options that you are requesting. For Innocent Spouse Relief and Separation of Liability Relief: request this relief no later than 2 years after the date the IRS first attempted to collect the tax from you. (Note to self: always a good idea to save everything the IRS mails to you!) For Equitable Relief, request this relief during the time that the IRS has to collect the tax from you.

(Just to make it a little less clear, ahem, there are only certain types of collection activities that start the two year period. If you’ve got questions about this, then it’s time to call in the tax professional!)

Looking deeper

Remember the three areas of requests for Innocent Spouse? Here’s some more information for you to consider when speaking to your tax professional.

Innocent Spouse. To qualify:

  • You filed a joint return which understates the taxes to be paid. That ‘erroneous item’ must include your spouse’s income which was omitted, or could have to do with deductions, credits, and property taxes incorrectly reported on the joint return.
  • You must establish that you did not know, and had no reason to think, that there was an understatement of tax.
  • You must convince the IRS that because of this, it would be unfair to hold you liable for the tax burden.

Separation of Liability relief. To qualify:

  • You are divorced, legally separated, or widowed from the spouse with whom you filed the joint return, OR you have not been a member of the same household as the spouse with whom you filed the joint return, at any time during the 12-month period prior to you filing the form.
  • Again, you must convince the IRS that when you signed the joint return, you had no actual knowledge of the misinformation that caused the understatement of tax.

Equitable Relief. To qualify:

  • You have to meet a lot of requirements! You can take a look at IRS Publication 971 for the details…but remember that…
  • You qualify for this only if you do not qualify for Innocent Spouse Relief or Separation of Liability relief. Again, the issues must have to do with additional tax owed because income was not reported, or because of a reporting error, or taxes due have not been paid.

Troubling times in life are hard enough without having to try to understand the correct path to take. At times like that, it is important to have a trusted professional to handle your tax issues.

For more information on the assistance a qualified tax professional can give you, contact Litchfield County, Connecticut tax attorney Martha Miller, admitted to practice in CT, NY, and before the US Tax Court at 860-435-4666. We accept state tax problems for CT, MA and NY, and we accept U.S. federal tax problems from any location in the world.