Married couples share everything, and that includes debt as well as assets. This means, unfortunately, that any tax debts one spouse incurs also affect the other.
When your spouse commits a tax fraud or error that you had no idea existed, this can be a shock at best. You may have options to alleviate some of this unfair burden through IRS innocent spouse relief.
This process may absolve you of debt if your spouse unfairly left you in this sort of situation. In addition, other forms of situational spousal relief exist if you meet the right qualifications.
Qualifying for innocent spouse relief requires a heavy burden of proof, and this means seeking experienced help from a tax relief agency like Instant Tax Solutions. We can use our nearly 20 years of experience to go over your finances and prove that you deserve relief.
We operate with honesty and integrity, and we have the knowledge, tools, and experience to help you negotiate tax relief. Contact our Portland tax lawyers at (888) 363-8958 or contact us online today for a free, confidential, no-obligation review of your case.
What Is Portland IRS Innocent Spouse Tax Relief?
Innocent spouse tax relief is offered in very specific situations by the IRS. To qualify for this type of tax relief, you must have filed a joint tax return with your spouse, which understated the amount owed.
You must have had no knowledge of the errors that caused this understatement and are now facing IRS collections efforts resulting from the errors. Errors that could result in this sort of circumstance include unreported income, taking credits or deductions to which you were not entitled, or undervaluing assets.
Such relief is only available to new tax burdens based on old tax returns. This means that you and your spouse filed a tax return online and paid the estimated taxes filed when due; then, later, the IRS uncovers the error and demands that you pay the unreported remainder.
This is key — regardless of the reason, to qualify for innocent spouse relief, the IRS must have double-checked your return after it was received and then must reassess your tax with an added balance. This reassessment is what may qualify you for innocent spouse relief.
Any taxes that were fully known at the time of filing but were not paid do not qualify for innocent spouse relief in most cases. Also, if the IRS is after you because you have not paid the tax that you declared, you will not qualify for this form of relief, either.
In addition, if you earned the income in question, you cannot qualify. Likewise, you may not qualify for earnings on businesses, payments to household employees, or penalties from trust fund recovery for employment taxes.
What Is Portland Separation of Liability Relief?
Separation of liability relief may be available in cases where innocent spouse relief is unavailable.
Separation of liability relief is for divorced or separated couples, where both filers are responsible for any underreported tax liability. In these cases, it may be possible to reduce the tax burden based on the part of tax assessed from your personal activities.
Such a split is based on the amount of money and assets earned and held by each spouse. In some cases, such a split may be 50/50, with each spouse being responsible for half the burden.
In other cases, the split may be wider, such as 90/10 in favor of the lower-earning spouse. In the end, the IRS makes the decision based on their assessment of each spouse’s contribution to the tax burden.
Post-Divorce Tax Relief
When you file a joint tax return, you share the responsibility for tax debt on reported income or income that should have been reported. The simple act of divorce does not free you from the responsibility you bear.
This requirement means that moving forward, you are not responsible for your ex-spouse’s individual tax returns, but you are still responsible for tax returns while you are married. Even if your spouse agrees to relinquish responsibility in your divorce agreement, you are not relieved of legal responsibility.
In this case, your best bet is separation of liability, which allows the courts to make a separate decision specific to tax liability.
What Is Injured Spouse Relief?
Injured spouse relief happens after the IRS seizes your tax refund payments to pay your spouse’s balance, returning some or all of this money to you. It is available if you would have qualified for innocent spouse relief before the tax refund was seized or if other reasons exist for you to be alleviated of responsibility for back taxes owed.
In these cases, the IRS may be willing to refund the seized return.
What Is Portland Equitable Relief?
Finally, equitable relief may be available for those who do not otherwise qualify for innocent spouse relief but have a valid reason why they should not be held liable for unpaid taxes. It is a sort of catch-all term for relief granted that does not fall under one of the other spousal relief rationales above.
The IRS approves equitable relief on a case-by-case basis, and it requires a significant burden of proof.
How to Prove an Innocent Spouse Relief Case
Proving that you are eligible for innocent spouse relief, separation of liability, injured spouse relief, or equitable relief can be very complex.
It begins with proving that you are indeed innocent of the underreporting of taxes. You must have had zero knowledge that errors were made or of the exact nature of the incorrect or dishonest activity that led to those errors.
If you have knowledge of any part of it, be it the underreported income, the existence of disallowable deductions or credits, or any other aspect of the errors, you may not be eligible for alleviation of the tax burden.
It goes even further: the IRS also considers if you should have known about the errors. If they feel that any reasonable person would have spotted the issues on your return, they may still hold you accountable.
In the end, you must prove that you had no knowledge of the errors and had no reasonable way to know about the errors. Meeting this burden of proof can be tricky and requires help from someone who understands how the IRS thinks, what they look for, and what they will accept as evidence.
Instant Tax Solutions has been dealing with the IRS and offering tax relief solutions to people like you for many years. We are ready to help you prove that you were innocent of the tax burden upon you and help you get out from under the weight of this tax debt.
Domestic Abuse Exception
The only exception to the knowledge of tax fraud is if you had a credible fear of retaliation or physical harm from an abusive spouse for challenging the fraud. Likewise, if your spouse threatened or otherwise coerced you into signing the return, you may be able to claim a domestic abuse exception.
To claim this exception, you must show that your spouse was abusive before the return was signed. You can use any evidence to conclude abuse had occurred, including a finding of abuse by a court in the past.
Innocent Spouse and Other Tax Relief
It is very important to understand that you cannot gain innocent spouse relief if you have already obtained some other forms of relief from the IRS for the same tax debt. This policy refers to anyone who has already worked out an installment agreement, had gotten an offer in compromise accepted, or received other forms of relief associated with their back tax burden.
Likewise, if a court decision has already denied you a similar form of relief, you may not be granted innocent spouse relief. Finally, if a court case showed that you had knowledge of taxes that were unpaid and that you believed you were innocent but did not request relief, you cannot later apply for innocent spouse relief.
If, however, you have gained other forms of tax relief not connected to the same debt and do not meet the above circumstances, you may be able to receive innocent spouse and other tax relief in the same year. If you are not sure whether you qualify, ITS may be able to help.
Removing Penalties and Fees
It is worth noting that the IRS will not always pause or cease other collections efforts on assessed taxes while considering an application for innocent spouse relief, separation of liability, or other similar forms of relief. This policy means that penalties and fees can still be applied, and interest will continue to accrue on existing fees and penalties.
You may, however, be able to argue separately for alleviation of penalties and interest. While you cannot have the interest removed on its own, you may be able to get the IRS to agree to remove the fees and penalties associated with your back taxes, which can be a step in reducing the overall amount you owe.
Instant Tax Solutions can help you with this separate step and even help you explore other options to reduce the tax burden you owe. We are here to review all your finances with you and help you build a sustainable plan to get your financial future back.
Get Help with Portland Innocent Spouse Relief Today
Whether it’s removal of penalties and interest, applying for innocent spouse relief, or reviewing past tax returns for errors, Instant Tax Solutions has the experience, knowledge, and tools for anyone in need of getting out from under the weight of past-due taxes. Let us help you explore your finances and build a case the IRS is more likely to accept.
You have rights, and we want to help you protect them. We can help you appeal denials and even represent your interests to the IRS to protect you in negotiations.
If you are ready to seek relief, we are ready to help. Call us today at (888) 363-8958 or use our online form for a free, no-obligation consultation.
