IRS Innocent Spouse Relief
What do we mean by innocent spouse relief?
It mostly happens that married couple jointly files tax returns for taking the benefits of money saving schemes. But at times these savings become disadvantage. Some time one partner forgets to mention his/her part of income in return, for which both are to be blamed, although other partner is completely unknown about the matter. In this case IRS can come after your tax refund to settle the amount which you or your spouse owes from your current account or from your spouse.
Some of the most common Innocent Spouse Relief questions asked by our clients are
How to request relief?
Should I include a letter when filing Form 8857?
When should I file Innocent Spouse Relief Form?
Where should I file my Innocent Spouse claim?
What is the number to call if I have questions regarding an Innocent Spouse?
What type of documents do I need to submit with Request for Innocent Spouse Relief?
I am afraid of what my ex-spouse will do, should I still file?
Can both spouses request Innocent Spouse relief?
Will the other spouse be notified that I filed a claim for innocent spouse relief?
What are the rules for Innocent Spouse Relief?
Why would a request for separate liability be denied?
If you request innocent spouse relief you will be provided relief from the penalty, interest and for payment of tax if your spouse or your former spouse improperly omitted or reported items in tax return. In general your spouse or former spouse will have to pay penalty or interest on payment of tax. But in case of joint filing of tax return both are liable for the default amount. For any confusion over the matter our qualified IRS tax lawyers San Diego will provide you each and every type of help.
How can I qualify for innocent spouse relief?
Understatement of the tax on the joint statement filed. This is either because of unreported gross income received by spouse or it may be either wrong information in the form of improper deductions, property or credit claimed by the spouse or former spouse in the tax written.
- At the time of signing of the tax return, you have no reason to believe that there was understatement.
- Under all these facts and circumstances it will not be proper to hold you guilty for understatement of tax.
Form 8857 Request for Innocent Spouse Relief
Innocent Spouse Relief Form 8857 (Rev. January 2014) – Download PDF
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Form 8857 Instructions
Download PDF Innocent Spouse Relief Form 8857 .- Download PDF
Under what circumstances relief not be granted to me?
When it become clear to the IRS and it has also strong evidence against you that you have transferred the money in the account of your wife or ex wife under some fake scheme. This scheme involves to defraud IRS, or to other third parties either they are creditors, or ex spouse or some partner in business.
How innocent spouse may request for this relief?
He is to fill Form 8857 to claim relief. It may take 6 months for the settlement of the issue. Under the IRS 2012 guidelines, time limit for claiming innocent spouse relief has been omitted, this means that if you have failed to file relief of early year because of old procedure of 2 yrs limit, you can make request now. It is also to be noted that if you have make request earlier and it was rejected for time period, you can also make request now.
If couples are filing independent returns are they still eligible for claiming innocent spouse relief?
In independent filing of tax return either of them cannot claim relief. But in case of community property estate, even if they file separate tax written, spouse may still be liable up to the level of his/her share in the property. What is this “Community property”? It is the property which is owned by both spouses in marriage. It is distinct from separate property which is owned by one spouse individually.
Separation, divorce or widowed can claim relief
If you are living separate from your spouse since last more than 12 months either by way of divorce, separation or being widowed and you file for relief, IRS may grant you, by assigning a certain amount of tax liability on you and certain amount on your wife. In this case you will be liable for your part of tax debt along with irs interest and penalties.
- Actual Knowledge: This shows that you know very well about the wrongly mentioned statement in the tax return on behalf of your spouse or ex spouse. And the relief which is claimed will not apply to such item and you and your spouse or former spouse will the liable for that statement.
- Reason to know: This Shows that a common educated person know about the error or omission under the circumstances.
Facts and circumstances which IRS will consider
The IRS will consider all facts and circumstances, before awarding you relief. Facts and circumstances are mentioned below:
- The finance situation of you and your spouse or ex-spouse
- You have failed to ask about the correctness of the figures in the tax return.
- Whether this mistake was repeated in the previous written also.
Under what circumstances IRS will provide partial relief?
You will be provided partial relief by the IRS, if after going through the return, IRS finds that there is error in one portion only and that error is not within your knowledge and other portion in the return are correct. You will be provided relief in relation to that portion.
If you face any problem relating to Innocent Spouse Relief our Professional Tax consultants are available to help you.