Tax Debt After Divorce (Innocent Spouse Relief) in Washington DC

One common way that married couples take advantage of tax savings is filing joint tax returns. Normally, the joint tax return is prepared by either the husband or wife, while the other spouse simply signs.

On occasion, the spouse will intentionally hide important financial information and as a result will signal a huge red flag once the Internal Revenue Services (IRS) gets a hold of it. Because both the husband and wife signed the return, they are both responsible to handle any taxes owed on the joint return, even after divorce.

This huge drawback to filing jointly can result in a substantial amount of taxes and liability on both parties, even if one spouse was not responsible for the heinous crime. Fortunately, a spouse can claim what is known as Innocent Spouse Relief and avoid paying the other spouse’s taxes.

Understanding one’s options when it comes to tax debt after divorce (Innocent Spouse Relief) in Washington DC can be perplexing, especially when the spouse is required to show the IRS that the other spouse was irresponsible during the filing process. A knowledgeable IRS tax debt attorney in Washington DC can provide substantial legal counsel to help one become eligible for innocent spouse relief.

Understanding Innocent Spouse Relief

As stated before, both spouses are implicitly liable for unpaid taxes on a jointly filed tax return. Under fixed conditions, one spouse may be able to seek relief from joint liabilities while the other spouse is held responsible for the entirety or most of the taxes by requesting Innocent Spouse Relief.

The Innocent Spouse Relief can be a difference-maker in some cases, especially when a considerable amount of money is involved. To qualify, the spouse must meet the following requirements:

  • The spouse filed a married filing jointly tax return and has an understatement of tax solely due to the other spouse’s actions which includes income received but was omitted from the joint return.
  • The spouse was not aware and had no reasons to know there was an understatement of tax.
  • The spouse believes, after taking into account the totality of the situation, that it would be unfair to be held responsible for the understatement of tax.

Important Facts About Spousal Liability

From a practical standpoint, the IRS does not have the resources to make a determination of which spouse is responsible by simply looking at the joint tax return. Doing this would require the IRS to review hundreds of thousands of joint collection accounts and make individual determinations on whom should be liable, which is just not realistic.

The IRS is not bound by divorce decrees or any legal binding agreements reached by each of the spouses. It becomes unfair to limit the collection rights held by the IRS by virtue of an agreement that did not involve the government. Fortunately, the IRS also recognizes that it is unfair to hold innocent spouses liable in all circumstances, thus creating several avenues where innocent taxpayers can seek relief.

Absolving one’s past liability requires the spouse to understand each aspect of Innocent Spouse Relief in order to make a successful claim.

Securing Innocent Spouse Relief for Washington DC Residents

The goal of every innocent spouse claim is to get it accepted by the appeals office without having to fight against the system. Unfortunately, this may not always be possible.

In order to create a fundamental structure on dealing with tax debt after divorce (Innocent Spouse Relief) in Washington DC, it may be in one’s best interest to contact a skilled attorney. For more information, call today.