Innocent Spouse Relief: How a Tax Resolution Attorney Can Help

Your spouse finding themselves in trouble with the IRS does not have to spell trouble for your entire family. If you receive an unexpected letter from the IRS about tax claims you had no knowledge or control over, you might be able to file for Innocent Spouse Relief and not be held responsible for that tax burden. If you have never heard of this exception, don’t worry. You are not alone. While millions of people find themselves in sticky situations with the IRS because of a misfiling that they had no part in, a significant number of these partners do not file for Innocent Spouse Relief and go down with the ship. Find out how you can protect yourself, your family, and your personal assets. 

What is Innocent Spouse Relief?

Innocent Spouse Tax Relief is a type of tax relief available to married taxpayers who filed a joint tax return with their spouse but were unaware of errors or misrepresentations on the return. This relief is designed to protect a spouse who had no knowledge of the errors or fraud committed by their partner.

In general, when a married couple files a joint tax return, both parties are jointly and severally liable for any tax, interest, or penalties due on the return. However, under certain circumstances, the innocent spouse may be able to receive relief from this joint liability.

Types of Innocent Spouse Relief

Though we use the term Innocent Spouse Relief as a blanket term for any program that offers relief for non-filing spouses, there are actually 3 distinct spousal tax relief programs with different qualification requirements, benefits, and drawbacks. 

Innocent Spouse Relief

This type of relief program is meant for situations where one spouse or former spouse can demonstrate beyond a shadow of a doubt that they were unaware or had no reason to know about an incorrect or misrepresented item on the joint tax return. The innocent spouse can request relief from the IRS for their share of the tax liability, penalties, and interest associated with the error.

This is the most common type of spouse relief, as well as the most straight forward. Cases in which taxes were filed electronically by an account associated only with one spouse are just one example of a type of case you can make when filing for Innocent Spouse Relief. Another reason a spouse might have no knowledge or reason to know of a misfiling is if the spouse is a non-earning dependent. 

Separation of Liability Relief

With Separation of Liability Relief, the IRS allocates the understated tax, penalties, and interest between the spouses or former spouses. This allocation is based on the individual’s proportionate share of the tax liability. In this case, the requesting spouse is only responsible for the portion allocated to them.

The most important difference in these types of relief programs is that Separation of Liability Relief is specifically meant to assist spouses or former spouses who were not living in the same household at the time that the taxes were filed on their behalf. 

Equitable Relief

Equitable relief may be available if the requesting spouse or former spouse does not qualify for Innocent Spouse Relief or Separation of Liability Relief. To be eligible for Equitable Relief, the taxpayer needs to demonstrate that it would be unfair to hold them responsible for the tax liability. Factors such as abuse, financial hardship, lack of control or knowledge over finances, and other compelling circumstances may be considered by the IRS in granting Equitable Relief.

Do You Qualify?

Though each program has different requirement and terms that taxpayers must meet to qualify for any of the 3 types of Innocent Spouse Relief, there are a few general criteria that must be met:

• You must have filed a joint return with an understatement of tax due to incorrect items or omissions by the other spouse.
• At the time of signing the joint return, you did not know, or have reason to know, of the understatement of tax.
• It would be unfair to hold you liable for the understatement of tax.

Though it is not a requirement for all 3 types of Innocent Spouse Relief, being legally separated or divorced at the time of filing may help move the case along or prove that you had no knowledge of the improper filing. 

It is important to keep in mind that Innocent Spouse Relief is not automatic and must be requested by the spouse seeking relief from the unfair tax burden. The IRS will evaluate the request based on the facts and circumstances of the case to determine if relief is appropriate. 

Innocent Spouse Relief cases can be complex and require you file long, unfamiliar forms and submit several types of supporting documentation. This is why it is highly recommended that you consult a qualified tax professional to help you have the best chance of success throughout this process. 

How Can a Tax Attorney Help?

A tax attorney can be a valuable asset with any Innocent Spouse Relief case. Applying for Innocent Spouse Relief, providing the necessary documentation, and being in constant communication with the IRS can be overwhelming for the average taxpayer, especially when you are already in a highly stressful situation. Having someone on your side who has already been through the entire process many times over and is fighting for you can make a huge difference in the outcome of your case. Here are just a few ways having a certified tax attorney can help you make the most of your Innocent Spouse Relief case. 

Evaluating eligibility

A tax attorney can review your financial and tax situation to determine if you are eligible for Innocent Spouse Relief or if other avenues of assistance might be better suited for you. They can assess whether the understatement of tax was due to an error or omission by your spouse, if you are able to prove that you had no knowledge or reason to know of the understatement of tax, and if it would be unfair to hold you liable for the tax debt. These are all factors that the IRS will look at, but a tax resolution attorney can help you understand what the outcome is likely to be beforehand and help save you time and stress if you will not qualify. 

Preparing and filing Form 8857

The process of applying for Innocent Spouse Relief can be complex and requires completing IRS Form 8857, a form that you have likely never had to complete. Filing basic income taxes can be complicated enough. Add in another new, convoluted piece of paperwork and you are asking for yet another filing mistake. A tax attorney can assist you in completing this form accurately and thoroughly, as well as providing all necessary supporting documentation to back up whatever claims you are making. 

Communication with the IRS

A tax attorney can communicate with the IRS on your behalf and represent you during negotiations. This is likely one of the most overlooked benefits to working with a tax resolution attorney, but it cannot be overstated. Dealing with the IRS can be daunting for even the most confident taxpayer. IRS agents are there to act in the best interest of the United States government and they have years of experience under their belt. Tax lawyers are there to protect your rights and interests while advocating for the best possible outcome for your case.

Navigating the appeals process

If your application for Innocent Spouse Relief is denied, that does not necessarily mean the end of your case. A tax attorney can help you navigate the appeals process. They can prepare a written protest to support your case, represent you at the hearing, and negotiate with the IRS to reach the best outcome possible.

How to Find the Right Tax Attorney

If you are seeking relief from a tax burden you did not bring on, Innocent Spouse Relief could be the answer. Unfortunately the process is a long and complex one that can be difficult to navigate alone. It is important that you choose the right team of people to go into battle with. Like choosing any other service professional, the best way to ensure that you are getting everything you need out of your tax attorney is by doing as much research on potential attorneys as possible. A quick Google search can help reveal many things about a person and their practice. Do they specialize in any specific aspect of tax law? Are they actively licensed to practice law? Do they communicate effectively with their clients? Make sure you are asking yourself the questions that are important to you. 

Another way to make sure that you are choosing the right person for the job is to look at online forums or talk to any friends and family members that might have gone through something similar to see if any of them have any recommendations. First-person accounts are a powerful tool at your disposal and the internet has made finding direct testimonials easier than ever. 

Call the Law Office of Steven Klitzner Today!

To get answers to all your Innocent Spouse Relief questions and more, give Steve Klitzner a call! He has worked with countless clients struggling with the same problems and helped find them the support they deserved! Call our office at (786) 977-2924 or visit us online to book your free consultation today.