Many people have heard the term, Innocent Spouse, but they don’t really know what it means or how it works. Over the next several weeks I will explain.
My firm, By The Book Taxes, located in Norwalk, CT specializes in income tax preparation for individuals, families and self-employed people. By the Book Taxes also helps clients resolve their tax debts by preparing and filing Installment Payment Agreements, Offers-in-Compromise, Currently Not Collectible and Innocent or Injured Spouse applications.
Generally speaking, Innocent Spouse claims arise after a married couple divorce. During the marriage they filed joint income tax returns. After the divorce, while the ex-spouses are living separate lives, outstanding tax liabilities for their married years may still exist and the IRS is attempting to collect.
Due to the legal concept called “joint and several” liability, each spouse is legally liable for all the tax owed even though the income and resulting tax liability may be mostly or completely attributable to only one of the spouses.
Joint and several liability overrides what divorce settlements say regarding who will pay the tax. The IRS is not bound by the terms of the settlement that Divorce Court accepts.
Typically, the ex-spouse with the lesser amount of income or no income during the marriage will consider it unfair to be held responsible for tax liabilities mostly or completely generated by the higher earning spouse, especially if those taxes go unpaid.
The remedy available to the aggrieved ex-spouse is an Innocent Spouse Relief filing.
There are three (3) types of relief available under Internal Revenue Code Section 6015:
- Code Section 6015(b) – Traditional Innocent Spouse
- Code Section 6015(c) – Separation of Liability
- Code Section 6015(f) – Equitable Relief
Over the next several weeks I will go into detail about all these remedies.
If you have years of unfiled tax returns or owe the back taxes, please call me. I can help.