Paying taxes is no fun; it is made all the more frustrating when tax liability exists due to the wrongful actions of another. In some cases you can seek to have your spouse (or ex-spouse) held responsible for taxes even if the return was a joint return. The qualifications for this beneficial status are strict, but if you qualify the results are priceless. This is especially true if you are trying to resolve a tax issue during your divorce.
In cases where an error was made on your joint tax return, but of which you were unaware, you may be considered an innocent spouse. The IRS will allow for a spouse without knowledge of improper reporting to avoid liability for the error. IRS Publication 971 sets for the requirements:
● You must have filed jointly and your return must understate what is truly owed.
● The understated amount must be the result of improper reporting, either by taking deductions to which you are not entitled or by failing to report all taxable income.
● The inaccurate information must have been information that was provided by your spouse and of which you were unaware.
The key is proving you had no knowledge of what your spouse was reporting on your return. This determination requires a thorough analysis of all the facts, such as whether you share banking accounts, who is primarily responsible for finances within the home, and any other factors unique to your situation. Timing is also an issue. You only have 2 years from the date the taxes are due to apply for innocent spouse status. For more information on divorce and taxes, call our office.
For answers to your questions about divorce, consult a qualified legal professional. Let us put our experience to work for you. Call The Sampair Group in Phoenix and the West Valley today to schedule your appointment.