Innocent Spouse Relief and Why You Should Care
Did your husband or wife sign the IRS returns on your behalf, physically harm you, psychologically abuse you or control your finances. If this is the case, you might qualify for Innocent Spouse Relief.
I have recently had several clients contact me about these specific issues, but here is an example. My client was an incredible loving mom who was married to a man who when times got tough mentally and physically abused her. She loved her husband and as long as their financial situation was good, so were things with them. However, once times got tough so did their marriage.
My client worked a regular job to help support her children and when things got bad she was the sole provider. She never thought of leaving her husband because it was against religious and social norms. She had spent all her savings trying to support her kids and depleted all assets and one day her husband walked out and left her.
A few years later she opened the mail and found a surprise, however, this was not a happy one. Her husband, who was in control of the finances got audited and left her a tax bill in excess of $100,000. She was devastated and did not know where to turn. She was speaking with a revenue officer who was trying to collect the money from her and her husband, but he was unwilling to listen. Because of the amount of money she owed, she could not get into a streamline installment agreement and would not qualify for an Offer in Compromise. She was being garnished by the IRS and was deeply depressed when she came fore help.
We talked to the Revenue Officer and explained the situation. He gave us a very short time to file and Innocent Spouse requests. At first we were denied, which was very upsetting as she had a very strong case. We then took it to appeals where it was determined she owed $2,300. This was an incredible triumph and victory for her as it was her husband who failed to pay taxes on his self employment income.
Several years ago this would not have been possible, but the IRS has eased restrictions not only on filing an innocent spouse claim, but has also significantly lowered its opinion on what constitutes "abuse." With that being said, you can still be entitled to Innocent Spouse Relief even if you are not a victim of abuse. The IRS has always stood by the rule, that when you sign a return, you check the return for accuracy and you know what information is on the return. For this reason, both taxpayers are jointly and individually liable for the tax.
Up until very recently you only had 2 years to file for innocent spouse relief, but the IRS has just determined you now have up to 10 years to file. This coincides with the IRS collection statute, which is 10 years as well. To sum it up, as long as the IRS can collect money from you, you have the opportunity and right to file for Innocent Spouse Relief.
If you have any questions, give me a call or email me at firstname.lastname@example.org.