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Tax Relief for Innocent Spouses: Frequently Asked Questions for Resolving IRS Back Taxes

If a taxpayer can prove they fit in the IRS guidelines for innocent spouse tax relief, they may not be subject to the taxes caused by their spouses or ex-spouses. In order to help taxpayers that are being subjected to IRS problems because of their spouse's actions, the IRS has come up with guidelines for innocent spouse tax relief where a person may qualify for resolving IRS back taxes, interest and penalties related to a spouse (or former spouse).

An expert tax attorney or Certified Tax Resolution Specialist can help you determine if you qualify for innocent spouse tax relief by helping you understand and meet these IRS guidelines You will also want to check out the answers below to the top ten innocent spouse questions that tax attorneys and Certified Tax Resolution Specialists get from people seeking innocent spouse tax relief.

Tax Relief for Innocent Spouses Question #1: What do I do first? You will need to file Form 8857, a Request for Innocent Spouse Relief with the Internal Revenue Service. Once you file for an Innocent Spouse Claim, the IRS will send you a questionnaire for the purpose of verifying the validity of your story. It's a good idea to consult with an experienced tax attorney or Certified Tax Resolution Specialist to help you through the process of sharing your financial information in innocent spouse cases as well as help you craft any additional letters or documentation that will bolster your case. Once everything is filed, it may take as long as six months for the IRS to contact your former spouse, review the evidence, and render a decision.

Tax Relief for Innocent Spouses Question #2: Can I do this without informing my former spouse? Unfortunately, there is no way to seek innocent spouse relief and circumvent a former spouse. In this case, former spouse is defined as officially divorced, legally separated, widowed, or living in a separate household for a 12-month period with no expectation of their return. The IRS is bound by law to inform the other party of the proceedings, regardless of your history with him or her, or the reasons behind the divorce. Some victims of domestic violence choose an Offer in Compromise Doubt as to Liability process instead of an innocent spouse defense. Ask your tax attorney or Certified Tax Resolution Specialist about all of your options so you can choose the path that is best for you.

Tax Relief for Innocent Spouses Question #3: My former spouse has already filed a Form 8857, Request for Innocent Spouse Relief. Can I file one, too? Yes, both spouses may file for innocent spouse relief for the same year's tax liability.

Tax Relief for Innocent Spouses Question #4: Am I liable for my spouse's Automated Underreporter Notice or CP 2000 Notice? If you filed a joint tax return, even if a divorce decree states that one spouse is responsible for amounts due on a previously filed joint return, the IRS holds both parties responsible for the tax, interest, and penalty due. Your tax attorney or Certified Tax Resolution Specialist can help determine if you are eligible for a measure that will relieve you of this responsibility.

Tax Relief for Innocent Spouses Question #5: How do I know if I qualify for innocent spouse relief? You will need to prove to the IRS that you meet all of the following criteria:

  • You filed a joint tax return that featured an understatement of tax.
  • The tax discrepancy was due to the erroneous actions of your spouse.
  • When you signed the joint return, you neither knew nor suspected that there was a tax misstatement.
  • Given the facts, it is unfair to hold you responsible.
  • You initiated innocent spouse relief within two years of the IRS's starting collection activity against you (after July 22, 1998).

Tax Relief for Innocent Spouses Question #6: If the IRS has already accepted my Offer in Compromise, can I still apply for innocent spouse relief?

Once an Offer in Compromise has been accepted for a certain tax year, that closes the books on it.

Tax Relief for Innocent Spouses Question #7: Can I apply for innocent spouse relief after signing a Closing Agreement? The answer varies with the type of agreement. (This highlights why it is so important to have a tax attorney or Certified Tax Resolution Specialist on your side to make sure you understand clearly what you are committing yourself to.)

  • Form 866, Agreement as to Final Determination of the Tax Liability - closed that tax year for good.
  • Form 906, Closing Agreement on Final Determination Covering Specific Matters - resolved only those issues specifically covered in the agreement. Anything not addressed is still negotiable.

Tax Relief for Innocent Spouses Question #8: The IRS has threatened to levy my bank account. Can I still request innocent spouse relief? As soon as the IRS receives the Form 8857 from your tax attorney or Certified Tax Resolution Specialist, they will cease all collection efforts until the matter is resolved. The only exception is if the collections statute of limitations is about to expire.

Tax Relief for Innocent Spouses Question #9: If I am paying an installment agreement on a joint return, can I still apply for innocent spouse relief? Your tax attorney or Certified Tax Resolution Specialist can help you determine if your circumstances might qualify you for innocent spouse relief, but don't stop paying while the matter gets sorted out. You will have defaulted on the agreement. If your petition is denied you will be liable for the full amount immediately.

Tax Relief for Innocent Spouses Question #10: My first innocent spouse claim was rejected, but I have new information. Can I re-file? You may file a subsequent claim with the new information, but you will not have tax court rights.

These questions are just a starting point, but they will empower you to have an informed discussion with your tax attorney or Certified Tax Resolution Specialist, who can help you move forward and get on with your life.

For more information on achieving a tax resolution for your IRS problems, visit www.taxresolution.com for a free tax relief consultation or call 888-851-5894.

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About the Author

Michael Rozbruch is one of the nation's leading tax experts. A Certified Tax Resolution Specialist (CTRS), licensed CPA and the founder of Tax Resolution Services. He helps individuals and small businesses solve their IRS problems and is dedicated to educating the public on tax planning and other strategies for managing their personal and business finances.

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