The IRS recognizes several different filing statuses when it comes to taxes. These include single, married filing separate, married filing joint, and head of household. Things can get somewhat complicated when it comes to a married couple or the separation of a married couple.
People can apply for the innocent spouse relief if they feel that their spouse (or former spouse) had reported numbers that are unfair. If items are improperly reported on a tax return, the innocent spouse relief takes care of the responsibility of paying tax, interest, and penalties. Usually, the tax, interest, and penalties can only be collected from your spouse (or former spouse).
In order to get innocent spouse relief, you must fill out Form 8857. The IRS will then calculate the tax that you are responsible for. If you want to calculate it yourself, refer to Publication 971 in the IRS.
There are 4 requirements to meet in order to receive innocent spouse relief. They are listed below:
1. There was an understatement of a joint return due to erroneous items of your spouse (or former spouse).
2. You must establish that you did not know there was an understatement of tax at the time you signed the joint return.
3. Once you consider all of the factors, you must prove that it would be unfair for you to be held liable for the understatement of tax.
4. If you and your spouse (or former spouse) transferred property to one another as a fraudulent scheme, the innocent spouse relief will not be granted.
Even tough life events happen, taxes are still there. The innocent spouse relief can be of great benefit, but there are many variables to consider. If you plan on applying for this complicated process, you may need some guidance. At Rhodes-Murphy, we understand the importance of filing tax returns properly. If you have any discretion on how to file your taxes, please contact us soon.
