More than likely, you’ve heard of the benefits of filing a joint tax return after marriage. However, filing a joint tax return has its downsides – especially if your spouse has a history of federal debt, back taxes, or under-reported income. Before you know it, you may find yourself facing the phone calls, threatening letters, and stress of tax debt, even if you’ve done nothing wrong.
At Levy & Associates, our team of tax professionals has heard countless stories from current and former spouses who believed their spouse filed a joint return correctly each year, only to discover that they’re now responsible for thousands in unpaid tax debt. Fortunately, you may not have to carry the burden of your spouse’s tax liability if you qualify for injured spouse relief.
What is Injured Spouse Relief?
It’s critical to understand how the IRS views a joint tax return. When you and your spouse file a joint tax return, you both become responsible for paying your taxes under a principle known as joint and several liability. As a result, you and your spouse share your tax burden as long as you’re married.
Further, both you and your spouse are still liable for the taxes that you owe for the previous year, even in the event of divorce or death. If your former or current spouse owes money to the government in the form of tax debt, child support payments, student debt, or other obligations, the IRS will apply your tax refund against their debt.
However, a 1998 revision to United States tax laws included an innocent and injured spouse relief provision. Under the provision, you can file a claim with the IRS to receive your fair share of your tax refund, no matter if you’re married, divorced, or widowed.
Innocent spouse relief typically applies to divorced or widowed taxpayers. On the other hand, injured spouse relief applies to married taxpayers who discover that the IRS applied their expected tax refund to their spouse’s debts.
If the IRS used your expected tax refund to reduce the federal debt owed by your spouse, you may qualify for an injured spouse claim, which could enable you to obtain part of your refund following IRS approval.
Who is Eligible for Injured Spouse Relief?
Generally speaking, you may qualify for injured spouse relief if:
- Your spouse is either solely liable for the debt or incurred it before marriage. This means that you are not legally required to pay your spouse’s overdue back taxes.
- You can provide proof that you reported income on your joint tax return. You must provide proof that at least some of the income on your joint tax return was your own to claim your tax refund.
- You can provide proof that you made payments on your joint tax return. Finally, you must prove that you made payments on your joint return in the form of income tax, tax credits, estimated payments, or other types of payments.
After you submit a claim, the IRS will consider several factors, including whether your spouse deserted you, whether you have filed for divorce, and whether you received benefits from your tax return.
Then, the IRS will research your case to calculate how much you actually owe based on a predetermined equation. That said, you may also conduct an independent review to determine how much you owe and share your findings with the IRS.
Types of Innocent Spouse Relief
Depending on your circumstances, you may qualify for one of three kinds of injured spouse relief.
Relief by Separation of Liability
Relief by separation of liability enables you to divide the taxes, interest, and penalties between you and your spouse.
Innocent Spouse Relief
Innocent spouse relief eliminates your liability for paying part or all of your federal tax debt if you can prove that your spouse misreported your joint tax return.
Finally, if you don’t qualify for injured or innocent spouse relief, you may be able to claim equitable relief, which can relieve you of your liability for interest, penalties, and federal taxes.
Injured Spouse Relief Assistance from Levy & Associates
At Levy & Associates, our experienced tax consultants understand the stress, fear, and uncertainty of spousal federal tax debt. That’s why we commit to understanding your circumstances and exploring your tax relief options to the fullest extent of the law.
Whether you’re married, divorced, or widowed, our team will work with you to review your case and determine whether your current or former spouse included erroneous items on your tax return. We’ll also consider ways to minimize or eliminate your federal tax burden through innocent or injured spouse relief. Finally, we offer comprehensive tax resolution services to help you navigate the tax audit, levy, or lien process.
For more information, please get in touch with our Levy & Associates team today at 800-TAX-LEVY.