Joint tax returns are frequently filed by married taxpayers. In addition to lower tax rates, filing a joint tax return has certain advantages. Taxpayers are responsible for any tax reflected on their tax returns as well as any penalties and interest. In the event of an audit, both taxpayers are equally responsible for any additional tax owed. If a joint tax return is filed, even if one spouse earns all of the income and the tax is solely their responsibility, both spouses are equally liable if the other spouse earns all of the income as well. Underreported income or a bad deduction caused by one spouse result in a joint tax liability whether it is the spouse who underreported or the spouse who made the bad deduction.
Generally, innocent spouse cases involve self-employed husbands who are paid in cash. Joint tax returns do not include all of the husband’s income. Also, the spouse did not receive any benefit from this unreported income. Separation or divorce follows. Tax issues are often not addressed in divorce decrees. Neither the IRS nor the husband have been able to locate each other. Taxpayers are later discovered to have unreported income, additional tax is assessed, and collection attempts are made with the taxpayer who is easiest to find.
Case study Deceased Spouse Leaves Surprise IRS DebtIn this case study, our taxpayer’s husband was killed in an auto accident. In the wreckage, the wife discovered a briefcase full of IRS notices. Until that moment, she did not know that they had an IRS problem. She immediately retained the IRS Trouble Solvers™ which was able to obtain innocent spouse relief for her. Despite the devastating changes to her life caused by her husband’s death, she can now move forward knowing that she is free of any IRS problems.
There are different types of innocent spouse relief that are available, including separation of liability or equitable relief. A discussion of each type of relief is set forth below:
The Seattle tax lawyers at IRS Trouble Solvers™ has successfully negotiated many innocent spouse cases with the IRS since its inception in 1991. If you believe that you are an innocent spouse, please call us. We can help. Your BEST bet to resolve your IRS Debt!®