How to check eligibility for innocent spouse relief.
Filing tax jointly has some pros and cons. Generally, IRS encourages taxpayers to file their taxes jointly with their spouse to receive more tax benefits and discounts than they can get by filing separately. So it is definitely profitable for couples to file taxes jointly. But if they do so they both are responsible for complete tax debt, even if one of them understated the tax liability which attracted penalties. Luckily IRS provides a solution for this. One of the solutions is Innocent spouse relief. Innocent spouse relief is one of the tax relief techniques which is used by the spouses who want to avoid paying taxes or penalties which IRS may collect from them even if it was wrongly reported by their spouse or ex-spouse (if they have signed a joint return). Hereby wrongly reporting we mean any unreported income, incorrect deduction, credit, or basis. Now, who can qualify for innocent spouse relief? To qualify for innocent spouse relief, you must meet these conditions:
- You filed a joint tax return with your spouse.
- Your spouse or ex-made “mistakes” that caused you to understate the tax liability on your joint tax return.
- You didn’t know or had no reason to know about the understatement.
- It would be unfair to make you liable for the tax understatement.
In case you have not filed a joint return and your signatures were forged you have to prove the same. You can then request the IRS to cancel the joint return so that you are liable for your tax only. It must be less than two years since the IRS first attempted to collect this tax debt from you. If you are requesting a refund for taxes paid, you must file the request within 3 years after the date the tax return is filed or 2 years following the payment of tax, whichever is later. If these above conditions are met you should be able to apply for innocent spouse relief. Form 8875 is used to apply for innocent spouse relief. In case your spouse is dead, divorced or separated you will need to provide documents related to that.