Last week I gave an overview of the “traditional” version of the tax resolution option called Innocent Spouse. That article is linked here.

This week I will go into more detail on the second of the three types of Innocent Spouse filings, known as “Separation of Liability” filing covered by Internal Revenue Code Section 6015(c).

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.

Due to the legal concept called “joint and several” liability, each spouse is legally liable for all the tax owed on a joint return even though the income and resulting tax liability may be mostly or completely attributable to only one of the spouses.

One of the most important requirements for an Innocent Spouse filing is that a “valid joint return” was filed with the consent of each spouse without threats or duress.

The other requirements in a 6015(c) Separation of Liability filing are:

  • The requestor must be divorced or legally separated for at least 12 months prior to filing.
  • There must be an understatement of tax due to the under reporting of income or erroneous reporting of expenses that the requesting spouse had no knowledge of or reason to know.
  • Separation of Liability filing must occur within two years of IRS initiating collection activity.

In a successful filing, the IRS will split the joint return and treat each spouse as if they filed “Married Filing Separate” returns. Each spouse will be responsible only for the tax on their own income. No refunds are available.

Next week I’ll speak about Innocent Spouse relief under Section 6015(f) also known as “Equitable Relief”.

If you have years of unfiled tax returns or owe the back taxes, please call me. I can help.