Innocent Spouse
Substantiating an innocent spouse claim is not easy to prove. Certain conditions must be met before the IRS will acquiesce in allowing an innocent spouse to be relieved of liability. Requirements that must be met to allow for Innocent Spouse Relief are:
Innocent spouse has to demonstrate that they had no knowledge of the erroneous item(s) in the return;
Innocent spouse did not know about an understatement or underpayment when the return was signed and/or assumed the tax would be paid by their spouse;
Based on all facts and particular circumstances, forcing the innocent spouse to pay the tax would be inequitable;
Once the IRS begins the collection process, the innocent spouse files for relief within a two-year period.
Separate Liability Election
Under the Separate Liability Election, assuming there was no knowledge of the inaccurate return, an innocent spouse may find the rules are more liberal. Keep in mind that even if an innocent spouse can prove they had no knowledge of the inaccuracies, they may still have to pay for part of the tax liability.
In some situations, the Tax Court, not the IRS, decides the final determination of who is and is not eligible for innocent spouse relief. Generally, to be eligible under the Separate Liability Election, one of the following situations must apply:
An innocent spouse must be divorced or legally separated from the individual with whom the return was jointly filed;
The tax liability can be traced and attributed to the appropriate spouse;
The innocent spouse cannot have been living in the same household with the person with whom the return was filed jointly in any 12-month period ending on the date the election was filed.
An innocent spouse may not be fully relieved of all tax obligations. They may still be required to pay at least part of the tax burden. The burden of proof is on the innocent spouse, not the IRS.
Unfortunately, divorce does not exempt an innocent spouse from tax liability on a return that was filed during the course of their marriage.
Ways we have helped others
GPP has helped eliminate or reduce IRS liability for the following innocent spouse/collection cases:
IRS officer assessment before GPP's involvement |
After GPP's involvement & representation, client owed |
Result |
||
$3,000,000 |
$0 |
Won entire case |
||
| $70,000 | $1,900 | Substantial reduction | ||
| $1,000,000 | $21,000 | Substantial reduction |
How we can help you
Our highest priority is to shield you from further, direct IRS contact. This alone can give you peace of mind regarding a tax issue. The overwhelming burden of financial pressure can be lifted when we work together for your best solution. The steps we take are:
1) Listen and learn about your situation. Initially, we will schedule a complimentary interview to determine the extent of challenges with the IRS.
2) Sign a power of attorney. Allowing a professional to be the authority to represent you before the IRS takes stress off of you and your daily life.
3) Stop the annoying phone calls or notices. Our firm notifies the IRS that we are representing you, which requires the IRS to communicate with and contact us directly. Our focus is to stop any harassment and direct all correspondence through our office.
4) Make a plan. After meeting with you to diagnose the problem, we’ll recommend the best course of action based on our experience and knowledge of the options available. ?