Working The Puzzle From All The Angles

  1. Home
  2.  • 
  3. Tax Law
  4.  • Could Innocent Spouse Relief protect you from the IRS?

Could Innocent Spouse Relief protect you from the IRS?

On Behalf of | May 14, 2020 | Tax Law

After your wedding, you and your spouse integrate your lives. Your house, your finances and most other aspects of your life will wind up intermingled and shared. Most of the time, this situation benefits both parties. You can rely on your spouse to provide income if you get sick or otherwise can’t work for a while.

Your spouse can trust you to meet certain obligations that you agree on, like managing the payment of household expenses. It is a common practice for only one spouse to manage finances or taxes, but that can leave you at a disadvantage if serious issues with your taxes ever arise.

Unfortunately, the combination of your individual finances can mean that you wind up receiving a frightening letter from the IRS because of a mistake your spouse made on the taxes. As the spouse who does not file the taxes, there may be protection for you from both the financial liability related to the tax issue and any criminal charges that the government might choose to bring.

Innocent Spouse Relief protects someone who didn’t know about a tax issue

The Internal Revenue Service (IRS) is notorious for always getting their money. There is a common saying that the only things certain in life are death and taxes. The IRS can take extreme measures to secure taxes owed to them due to tax fraud or an intentional underpayment. They can garnish someone’s wages or secure a levy against their bank accounts. In some cases, they can even put a lien against your house.

However, they cannot penalize someone who did not violate tax law or play a role in the underpayment of taxes. If your spouse has been the one who handles the tax preparation, you may have had no idea about their mistake or intentional tax fraud.

Provided that you were unaware of the issue, and that you didn’t significantly benefit from the tax issue beyond what the government would consider normal support, you may qualify for Innocent Spouse Relief from the IRS related to the issue your spouse currently faces. The IRS will also consider whether you have separated, divorced or suffered abandonment by your spouse when assessing whether you qualify for Innocent Spouse Relief.