IRS Innocent Spouse Relief Program

 

IRS Innocent Spouse Relief: What You Need to Know 

You might be eligible for Innocent Spouse Relief to get rid of your tax debt. This IRS tax relief program is designed to help you with IRS debt when it is unfair to hold you liable for a joint tax debt with your spouse or ex-spouse. 


What is IRS Innocent Spouse Relief?

The IRS Innocent Spouse Relief program allows you to abate or avoid joint tax liability because of your spouse's tax filings, whether it was erroneous, fraudulent, or omissions. This IRS tax relief program also covers understated taxes (due to unreported income or incorrect deductions) or underpaid taxes. Innocent Spouse Relief can be a lifesaver if you unknowingly got tangled in your spouse’s tax mishaps.

  • For you to qualify for the IRS  innocent spouse relief, specific conditions must be met:

    1. Joint Return: You must have filed a joint return that understated or underpaid tax due to erroneous items from your spouse.

    2. No Knowledge: At the time of signing the return, you must have lacked knowledge of the understatement or underpayment.

    3. Inequity: Holding you liable for the tax must be considered unfair or inequitable.

    4. Timeliness: You must file for relief within two years of the IRS initiating collection activities.

    If you are thinking, "But how do I prove I didn't know?" The Innocent Spouse is a very difficult program to qualify for. However, the IRS will consider all the facts and circumstances, such as your level of involvement in financial decisions and whether the tax items were unusually large compared to your normal income.

Benefits of IRS Innocent Spouse Relief

Financial Protection

Innocent spouse relief can protect your finances by ensuring you are not held liable for income taxes, penalties, or interest that should be your spouse's sole responsibility.

Emotional Relief

Knowing that you are protected from unfair tax liabilities can significantly reduce stress and emotional burden.

What are the Steps to Apply for Innocent Spouse Relief

Applying for innocent spouse relief involves several key steps:

  1. Gather All Relevant Documents & Circumstantial Evidence for the Innocent Spouse case:

Collect all pertinent tax documents, including joint returns and any documents that support your innocence. This includes any prior bank statements, credit card statements, and utility bills. In addition, if you have any proof of wrongdoing by your spouse, you can provide any communication record, such as a log of Emails, Text Messaging, and pictures. 

  1. Submitting the IRS Innocent Spouse Relief to the IRS

The Innocent Spouse Relief is requested on form Form 8857, providing detailed information about the tax years in question and the reasons for seeking relief. It is highly advised to write a cover letter, detailing the facts & circumstances revolving around the IRS Tax Debt. When Submitting the packet, organize your supporting documentation in a way that would make the IRS Agent reviewing your case easy to understand. 

  1. IRS Innocent Spouse Relief Process, Procedure & Negotiation.

The IRS will review your application, which can take several months. Your request will be assigned an IRS Examiner to review the contents of your packet. In addition to reviewing your packet, contact will be made with your spouse, including gathering facts & circumstances from their side. 

  1. IRS Decision on Your Innocent Spouse Case

If granted relief, ensure you comply with any conditions attached by the IRS. The IRS may grant relief to all the tax debt or in some cases certain years of tax debt. The IRS may also deny your claim, which can be disheartening, but it’s not the end of the road. 

You have appeal rights on a rejected Innocent Spouse Relief by the IRS. The Initial IRS decision or Preliminary decision is sent out to both, you & your spouse. If you disagree, you have to appeal the decision within 30 days from the date of the IRS letter, by submitting IRS FORM 12509.

IRS Rejection of Innocent Spouse Relief & Final Determination Letter

If the IRS rejects your Innocent Spouse Relief Claim, they will send you the final determination letter which you have 90 days to timely petition the US Tax Court. Petitioning the US Tax Court begins the process of official appeals, where you have an opportunity with the IRS Office of Appeals to review & settle before a trial date with the Tax Court. 

How Long Does It Take to Process Innocent Spouse Relief?

The IRS innocent spouse relief is a long procedure that will take approximately 4-8 months to complete & for the IRS to reach a decision. The Innocent Spouse Relief will have to be investigated by an IRS agent, and the workload will depend on the availability of IRS personnel for assignment. Other factors to consider regarding the length of the procedure will have to deal with the IRS agent requiring additional information or proof from you, contact with your spouse, and Investigation & reports from Federal, State & Local authorities. 

Other IRS Innocent Spouse Relief Considerations: 

Community Property State:

The IRS will evaluate if you are located in a community property state, which has additional considerations for Innocent Spouse Relief. Community property laws mean that both spouses are typically responsible for debts incurred during the marriage, including tax debts. However, the IRS recognizes these unique circumstances and adjusts its evaluation accordingly.

Other IRS Tax Relief Programs

Navigating your tax issues can be daunting, but the innocent spouse relief offers a viable path if you have been unfairly burdened by your spouse's tax responsibilities. By understanding the eligibility criteria, application process, and potential benefits, you can take proactive steps toward financial and emotional relief.

It is best to review your total circumstances to evaluate what the best option might be to settle your tax debt. When the IRS Innocent Spouse Relief Program makes sense, then it is worthwhile to proceed. 

However, keep in mind that the IRS will consider any type of tax relief program you apply for. If you are wondering whether you are a candidate for the Innocent Spouse Relief Program, we can evaluate your circumstances & provide a free case review. 

Call (949) 506-3457 or Click Below to schedule your appointment. 

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