One of the benefits of marriage is the option for spouses to file a joint federal income tax return with the Internal Revenue Service (IRS). Generally, spouses are both responsible for any tax liabilities that arise in connection with the years covered by a jointly filed tax return. Thus, for example, if the IRS found an error or discrepancy in a jointly-filed tax return—such as unreported income from an undisclosed source—both spouses are liable to pay back taxes for understating their income that year.
However, if one spouse had nothing to do with the error, it might be unfair to require the innocent spouse to pay back taxes. This situation is particularly important in cases where one spouse was managing finances for the two, and wrongfully hid income from the other in anticipation of divorce. In such cases, IRS Code § 6015 provides tax relief to the unwitting spouse under what is known as the “innocent spouse rule.”
Statutory Requirements for Innocent Spouse Relief
To qualify for innocent spouse relief, a taxpayer must satisfy the following conditions:
- Filed a joint return
- Your current or former spouse understated taxes based on “erroneous items” on the tax return
- Proof that you didn’t know—or have reason to know—that your taxes were understated
- The circumstances are such that imposing liability for the understated tax on you would be unjust
Importantly, the innocent spouse rule applies to the acts of current or former spouses. As a result, innocent spouse relief is available for existent and former marriages. For example, if one spouse exercised an abusive and oppressive level of control over the other spouse to the extent that they wouldn’t dare question the sufficiency of the return or its preparation, this fact could support a claim for innocent spouse relief.
More information on innocent spouse tax relief may be found online in IRS publication 971.
For Quality Legal Advice, Call O’Neil Wysocki, P.C. Today
If you are going through a divorce, you should consult a qualified attorney with skill handling divorces and related tax issues. At O’Neil Wysocki, P.C., our legal team has years of valuable experience litigating family law matters and the tax issues that can arise as a result. We are committed to advising you about the full nature and extent of a family law issue and its tax consequences, so you and your family are always in the loop about significant issues that can impact your legal and financial interests.
To arrange your initial consultation with our skilled attorneys, call us at (214) 348-6723 or contact us online today.