Innocent Spouse Rule

An exception to the general rule that both signers of a joint return are individually liable for the entire tax due plus penalties and interest. Generally, when you sign a joint return you are liable for the entire tax due, even if you later divorce your spouse, did not earn the income that generated the tax, and did not know about the omission of income or claiming of erroneous deductions. Under the innocent spouse rule, a spouse may claim to not be jointly liable if he or she did not know about the errors and did not benefit from them.

Innocent spouse relief is generally easier today because of the IRS Restructuring & Reform Act of 1998. However, the Act does not automatically release a joint filer spouse from liability. A strict set of rules is applied to the facts of the particular return. The innocent spouse must establish that they did not know, or at least had no reason to believe, there was an understatement on the return or otherwise erroneous items (example: improper deductions). Equitable relief is also available if you can establish that taking all the facts into consideration it would be “inequitable” to hold the innocent spouse liable for the deficiency.

This is an area where one must carefully analyze the particular facts, apply the law and negotiate vigorously for relief. Contact us and we will assist in evaluating your options. In order to facilitate resolving your tax problems choose from Assistance Form. E-mail: gcoulter@gctaxlawyer.com or phone us at: 1.888.5TAXLAW or 1.706.546.9755. You can also complete the Form 2848, Power of Attorney in order for us to start now on your tax solution!