Relief for Innocent Spouses
Sometimes happily ever after doesn�t work out, and two people end
up going their separate ways. Although they might divide their belongings,
they can�t break up any previous tax bills or tax returns they filed together.
This is known as joint and several liability. It means that one spouse
is as liable as the other for all items appearing on returns they filed
together and equally liable to pay all the tax due, whether or not they�re
divorced. So if a joint return is audited, each spouse is liable for any
additional tax that may be assessed, even if it was from something the
other spouse deducted or forgot to report. In such a situation, a taxpayer
could request innocent spouse relief from joint and several liability.
In 1998, Congress passed a law making the requirements for obtaining
such relief less stringent. People can request this relief in three ways
- expanded innocent spouse relief, separate liability election and equitable
The expanded innocent spouse relief is a new version of an old law.
Prior innocent spouse requirements were relatively strict. The new law
relaxes those requirements to a point where taxpayers may be relieved of
a portion of the additional assessment they did not know about or had no
reason to know about.
Separate liability election allows certain taxpayers to elect to
have the additional assessment limited to the portion that would be allocated
to their share of the item(s) at issue, based, for example, on their own
earnings or deductions.
Equitable relief is available when a person does not meet the conditions
for innocent spouse or separate liability relief, but it would nevertheless
be unfair to hold the person responsible for an unpaid tax or an additional
assessment. Such a case might arise when one spouse did not know, and had
no reason to know, that the other spouse took the money intended for paying
the tax and used it for his or her own benefit instead.
The IRS has revised Publication
971, Innocent Spouse Relief, and Form
8857, which people may use to request this relief, to reflect the new
provisions of the law. Both are available by calling 1-800-829-3676.
Refund for Some
Expecting a refund, but haven�t paid certain bills? Some people may
find themselves waiting a long time. Federal law allows income tax refunds
to be taken to pay off all or part of past-due child and spousal support,
delinquent student loans, income tax or other federal debts. The IRS will
let people know if their refund was used to pay back what they owe.
- Write On
The IRS is listening to what taxpayers are saying. In response to
tax-payers� concerns about privacy, the IRS isn�t printing taxpayers� Social
Security numbers anywhere in the tax instruction booklets. But the tax
returns must still have the SSNs, so taxpayers should remember to write
them on before sending their returns to the IRS.
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