Filing returns can be a tedious and time-consuming job, and one should ensure that they are well equipped with all the necessary information regarding the entire process. There are no shortcuts to filing returns since they are a government requirement which must be met by all citizens. There are different types of taxes and reliefs. To understand the Innocent Spouse relief tax, here are some of the critical questions with solutions, to help you while filing your returns.
What is innocent spouse relief?
It is a tax reprieve from the additional tax you are indebted if your partner in marriage or former partner failed to report or wrongly reported income or falsified deductions or credit.
When should you file the innocent relief liability?
Form 8857 should be filled as soon as one becomes aware of a tax liability for which only one’s spouse or former spouse is believed to be responsible. Two years is the maximum time that the law allows one to request for the innocent spouse relief after the date the IRS first tried to collect the tax from you. When seeking a refund of tax paid, it must be requested within three years after the date the return is filed, which is also the statute period for seeking a refund. It can also be done two years after payment is made. Refer to Publication 971, Innocent relief liability.
Does one need to fill multiple forms for several years reporting?
No. One form is enough to cover multiple years of reporting.
How does one become aware of the obligation?
The IRS upon scrutinizing your tax return proposes to increase your tax obligation. The IRS will then send you a notification.
What are the conditions to be met to qualify for the innocent spouse relief?
There are several conditions that must be met before one qualifies for spouse relief.
These are:
Filing a joint return that has a tax deficiency resulting from the misreporting from your spouse or former spouse. It could be due to an error of omission by the spouse who fails to include all income received. Wrongly reported credits and deductions could also result in the tax deficiency.
Give enough evidence that at the time of signing the joint return, you were unaware that there was an underestimation of tax. This should absolve you from any wrongdoing, and you will not be punished because of the mistake of your spouse or former spouse.
What if one does not meet the qualifications for Innocent Spouse Tax Relief?
All is not lost when one does not qualify for the spouse relief. You may still be qualified for equitable relief by providing proof beyond any reasonable doubt that you were not liable for the under-estimated tax and that it would not be fair to hold you in liability for the same. However, you must meet all the other requirements listed in the Publication 971, Innocent spouse relief.
What documents need to be submitted when seeking the Innocent Spouse Tax Relief?
When seeking innocent spouse relief, a duly completed Form 8857(PDF), Request for the Innocent Spouse Relief which is signed under penalties of perjury is required. If the form is unavailable, a written statement containing the same information as would be found in the form is submitted. It will be signed under the same conditions as that of the form.
The IRS will be required to alert the spouse whom you filed the return jointly of your pending application and allow him or her to furnish IRS with facts which will inform the decision making concerning your claim.
What happens if you lived in a communal property and failed to file your returns jointly as a married couple?
You might qualify for relief from the operation of state community property law if you lived in a community property and you did not file as married filing jointly.
Community property states include the following:
- Arizona
- California
- Idaho
- Louisiana
- Nevada
- New Mexico
- Texas
- Washington
- Wisconsin
Will I automatically get a relief once I have filled all the requisite forms?
No. It is not automatic that one will be granted the relief applied for. Some factors will need to be considered and verified before the disbursement. Some of the considerations will include the following:
The current spousal status
The credibility of the application will affect the outcome of the results. The IRS team need to be fully convinced that the application is genuine.
How long does it take to complete the process and have the check ready?
A duly filled Form 8857, Request for the Innocent spouse relief takes up to 6 months to finish the processing. During the processing time, the service will be requesting for your tax information and contact the non-requesting spouse.
Where is the Innocent Spouse Claim Filed?
The Form 8857 should be sent to the following address:
Internal Revenue Service, P.O. Box 120053 Covington, KY 41012
Fax the Form 8857 and attachments to the IRS at 855-233-8558.
All attachments should have the name and social security number.
Are there any laws in place to protect the person filing from an aggressive or abusive spouse?
The law states that the IRS must contact your spouse or former spouse without any exception when processing your application.
The spouse will be allowed to participate in the process and will be informed of the preliminary and final result of your request.
IRS will not divulge the current personal information of the applicant for purposes of privacy protection. Examples are your current name, current residence or current employer and any other unrelated information.
Your spouse or former spouse may, however, become privy of your personal information should you petition the Tax Court.
What happens when there are further questions pertaining to the Request for Innocent Spouse Claim?
There is a toll-free number, 1-855-851-2009. Any additional information can be obtained from here.
Should I wait for the outcome of my claim to continue filing my current year tax return?
No, you do not have to wait for the results. File your returns normally it will not affect the outcome of your application.
Conclusion
Innocent spouse relief is a tax reprieve that can be applied by a spouse who feels that his or her partner failed to give the correct estimates regarding their income to the IRS. The application and subsequent approval will result in a refund. However, one has to follow the rules that have been laid down by the IRS.
Let the professionals at The Law Offices of Bj Richardson help you find the professional attorney to help you with your specific needs. We don’t handle every aspect of tax law, however, we can direct you to a professional that can handle any area of tax law that we don’t handle.
Call today for your free 30-minute consultation.
