Married taxpayers usually file a joint return, combining incomes and sharing deductions. By doing so, both spouses are held responsible for all the tax due even if one spouse earned all the income or claimed improper deductions or credits. This is also true even if they later divorce and the divorce decree states that a former spouse will be responsible for any amounts due on previously filed joint returns.
However, the Internal Revenue Service (IRS) provides three types of relief from joint and several liability for spouses that file joint returns:
- Innocent Spouse Relief- relief from additional tax you owe if your spouse or former spouse failed to report income, reported income improperly or claimed improper deductions or credits.
- Separation of Liability Relief- allocation of additional tax owed between you and your former spouse or your current spouse from whom you are separated when an item was not reported properly on a joint return.
- Equitable Relief- when you do not qualify for innocent spouse relief or separation of liability relief for something not reported properly on a joint return and generally attributable to your spouse.
To qualify for any of the above reliefs a series of conditions must be met. If you filed a joint return that has an understatement of tax, which is solely attributable to your spouse’s erroneous item or negligence and if you did not know or did not have reason to know that there was a substantial understatement of tax, you might want to seek one of the above reliefs. Also, if you live in a community property state, such as California, and did not file a joint return, you might qualify for relief under community property laws.
If you intend to obtain relief from joint and several liability, you should seek the assistance of an experience tax attorney to guide you through the process. Failure to meet one of the requirements and misguidance might cause a denial of your claim.
Contact us for a free consultation before proceeding with your relief claim. We will help you determine whether this is a viable option for you and whether you meet all the requirements provided by law.