What is the Process for Innocent Spouse Relief in California?
If you are married or recently divorced, separated, or widowed, you may have filed taxes jointly with your spouse. This can give you many benefits and deductions you can’t access filing as an individual, but it can also set you up for potential issues. If you filed jointly, you are jointly responsible for the taxes alongside your spouse. This means that, even if only one of you earned the income, the IRS can go after either one of you for payment.
Luckily, spouses that were pushed into problems with the IRS because of their spouse’s failure to report income or pay tax may have some options. The Roseville tax attorneys at The NewPoint Group may be able to help you with innocent spouse relief, separating your liability, or getting you equitable relief for your jointly filed taxes. Call today for a free consultation.
Innocent Spouse Relief Process in Roseville, CA
Innocent spouse relief is offered by the IRS to help those whose spouses caused tax problems. Like the name implies, this relieves the innocent spouse who had nothing to do with the tax problem of having to pay any additional tax. However, you must meet the IRS’ requirements before you can claim this relief. In short, the three requirements for innocent spouse relief are:
- Your spouse caused your joint taxes to have an underpayment,
- You did not know this at the time you filed the taxes, and
- It would be unfair to hold you accountable for the missing tax.
To explain in further detail, you first must first have filed jointly with your spouse, and suffered a tax deficiency. This means that there must be some underpayment the IRS is now attempting to reclaim. However, you must be “innocent,” in that the underpayment was wholly your spouse’s fault. This means that your spouse must have left income off the tax return, or claimed deductions, credits, or used other improper numbers in calculating tax, without your involvement.
In proving your “innocence,” you can only get innocent spouse relief if you did not know about the deficiency when you filed your taxes. This means that you had to have no reason to know there was an underpayment. Things like hidden or secret income would be a clear example of this. You also must prove that it would be unfair to hold you accountable for the tax – something that may be difficult.
Lastly, you have a limited time to claim one of these reliefs. You can only claim innocent spouse relief or another relief within two years of filing the erroneous return. This may mean working proactively, rather than waiting for the IRS to begin a tax audit – something that often happens nearly three years after filing.
To claim tax relief, talk to an attorney. The process requires filing forms and statements with the IRS to claim the relief. As mentioned, the process may not begin with the IRS, and may require you to act first to correct your taxes. Talk to an attorney to see when and how to begin filing for relief.
Other Relief for Spouses Filing Jointly
If you do not qualify for innocent spouse relief, you might have other options to save yourself from unfair tax situations. First, “separation of liability relief” may sever your obligations from your spouse’s under certain situations. Second, “equitable relief” may allow you to divide your underpayment and your spouse’s underpayment, so that you are not responsible for their errors, but only your own share.
Separation of liability is often available for people who are no longer with their spouse. This means that you must have a problem with a jointly-filed return, and must be:
- Divorced or legally separated;
- Widowed; or
- Living apart from your spouse for at least a year before requesting relief.
You must also be unaware of the tax error when you initially filed the return, otherwise you won’t qualify. This relief can help sever your spouse’s liability from yours, so that you cannot be asked to pay for their errors if you are divorced or separated (or your spouse has already passed).
Equitable relief reallocates the fault in jointly filed taxes, and only holds each taxpayer responsible for their own taxes. This may be available if you do not qualify for other forms of relief, focusing on what would be fair for you to pay. This may be available for victims of abuse or spouses held under strict financial control.
Roseville, CA Tax Lawyers
Talk to a tax attorney today about your options for tax relief when filing jointly, and to see whether you qualify. The process of claiming innocent spouse relief relies on the specifics of various tax rules, and an experienced tax relief attorney may be able to best help you claim the tax relief you need. Call NewPoint Group today at 1-800-358-0305 to schedule a free consultation with our Sacramento tax lawyers.