Three Types of IRS Relief for Spouses Who File Jointly
If you have recently gone through a divorce or you are currently going through the process, deciding whether to file your taxes jointly with your spouse or separately is probably weighing on your mind. This can be a complicated decision to make, and there is no one solution that works for all individuals and couples. The best way to determine whether filing your taxes jointly or separately, is to work with a financial adviser to understand how your tax burden is calculated, what your responsibilities are if you are filing jointly or separately, and all of the possible types of relief that you may be able to receive.
Innocent Spouse Relief
If your former or current spouse reported his or her assets or earnings incorrectly on his or her tax return, you may be spared the responsibility to pay the correct amount or penalties that accompany it through innocent spouse relief. To qualify for this type of relief, you must prove that you did not know about the tax understatement and that it would be unreasonable for you to be held accountable for it.
Relief by Separation of Liability
This type of relief is meant for individuals who are divorced or legally separated from the spouse with whom they filed a joint tax return. What this type of relief does is separate a tax understatement on a tax return from one spouse, effectively relieving him or her from the penalties associated with it. To qualify for relief by separation of liability, you must meet the following requirements:
- You must be separated, divorced, or widowed from the other party on the joint tax return; and
- You must not have resided in the same household as him or her during the 12-month period prior to filing your tax return.
Individuals who do not qualify for either of the types of relief listed above may be able to have their joint tax obligations relieved through equitable relief. The IRS considers this as an option if an individual requests either of the types listed above and does not qualify. This can be due to understatement or underpayment of taxes. Factors the IRS considers when determining whether to grant this type of relief include:
- Whether the individual seeking the relief is divorced or separated from his or her spouse;
- Whether failing to provide the relief would cause the individual financial hardship;
- Whether the individual complied with federal tax law in good faith;
- Whether the individual had reason to know about the understatement; and
- Whether the individual’s former spouse has the legal obligation to pay the tax detailed in the couple’s divorce agreement.
Work with an Experienced Florida Divorce Attorney
When you are going through a divorce, paying your taxes might be one of the last things on your mind. But it is important that you develop a thorough understanding of your tax responsibility and all of the options available to you. For representation through the divorce process and guidance as you determine how to file your taxes this year, work with divorce attorney Aubrey Harry Ducker, Jr. Contact The Law Offices of Aubrey Harry Ducker, Jr., PLLC today to schedule your free legal consultation with him.