The IRS is required to inform you when your spouse or former spouse has requested innocent spouse relief. The IRS determination on this issue certainly concerns you because any relief given to your spouse will result in some or all of a joint tax liability being transformed into your sole responsibility.
If you are informed by the IRS that your spouse has requested innocent spouse relief, contact a tax attorney to discuss your options.
Issues That Determine If Relief Will Be Granted
Depending on the type of relief your spouse or former spouse is seeking, there may be several issues that determine their eligibility. As the joint filer of the return, you will be in a unique ability to provide evidence or testimony to counter your spouse’s assertions.
In traditional innocent spouse relief, the request should only be granted if the erroneous item on the return is solely attributable to the non-requesting spouse and that the requesting spouse didn’t know about the understatement of tax. You could counter these allegations if your spouse was fully or partially responsible for the erroneous item, or if he or she knew about the understatement on the return.
For separation of liability relief—assuming the other requirements or met—the main issue would be whether your spouse had actual knowledge of the understatement of tax on the return.
Many issues can come up when a spouse requests equitable relief. Once again, their knowledge of the erroneous item could disqualify them from relief.
You can also dispute other claims used to determine whether equitable relief should be granted, such as whether your spouse significantly benefited from the understated tax. If your spouse bought a new car shortly after you received your oversized tax refund, this may weigh against a finding that relief should be granted.
The IRS will make its decision in two stages—a preliminary determination and a final determination. You can appeal the preliminary decision, but the non-requesting spouse cannot appeal a final decision.
On the other hand, your spouse could appeal the final decision by petitioning Tax Court. You have the legal right to be a party to these proceedings.
Consult your tax attorney to make sure your rights are protected and that the IRS has access to all the evidence necessary to make an innocent spouse relief determination.
The Gartzman Law Firm offers delinquent tax return preparation and tax settlement help for both federal and state tax debt. Use our contact form to request a consultation with an Atlanta tax resolution attorney.