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Washington Tax Services has been assisting individual taxpayers and small businesses with their past due tax troubles since 1989.  Whether you have been dealing with the IRS for years and can't get caught up, or are just now falling behind and don't know where to begin - We know the tax collection system and have the experience and expertise to get you the best results possible under the law. 

Many married taxpayers choose to file a joint tax return because of certain benefits it allows.  Doing so means that they are jointly and individually responsible for the associated tax liability and for any penalties or interest that may be assessed.  This is true regardless of who earned the income or even who was responsible for actually filing the return.  If an error or omission is made by one spouse, the other can still be held liable for any debts or penalties that may incur because it. Even a divorce decree that assigns the responsibility for the taxes to one spouse does not remove the liability from the other.  Although joint and individual liability is intended to encourage honesty, it can sometimes lead to an unfair situation if one spouse had no knowledge of the mistake.

Though some may contend otherwise, the IRS does NOT intend to punish people for something that was never their fault, and so in certain cases a spouse may be relieved of a jointly-filed tax debt if he or she can indeed prove that they were not aware of the other’s actions. This is called Innocent Spouse Relief. 

In order to qualify for Innocent Spouse Relief you must have filed a joint return which has an understatement of tax due to erroneous items created by your spouse. You must also prove that at the time you signed the return you had no knowledge that there was an understatement and that, given the facts and circumstances, it would be unfair to hold you liable for it.  If you did know about the understatement, or you and your spouse were engaged in some type of scheme to defraud the IRS, then you certainly will not be granted Innocent Spouse Relief.

The IRS will consider all the facts and circumstances in determining whether you had reason to know of an understatement, including: the nature and amount of the understated item, your financial situation, your educational or business experience, the extent of your participation in the activity that resulted in the erroneous item, and whether that item was a significant change from your prior years’ returns.

In determining the unfairness of holding you responsible for the understatement, the IRS will consider any circumstances of divorce, separation or desertion as well as whether you received a significant benefit from that understatement.  A significant benefit is any benefit, whether direct or indirect, in excess of normal support, even if the benefit was received several years after the understatement item occurred. 

As with pretty much any application for Tax Resolution, Innocent Spouse Relief requires proper documentation and also a formal declaration of why you believe you qualify for this type of relief.  Detailing your financial and personal circumstances at the time the error was made will be critical to your success and, of course, any evidence you can provide will go a long way toward legitimizing your argument.  Keep in mind, you only have two years from the time that the IRS first attempts to collect the tax from you to file for Innocent Spouse Relief, so it is highly recommended that you act as soon as you become aware of the liability.    

 For More information on how Innocent Spouse Relief can help you, please call today: