If you've been charged with a tax debt that is entirely caused by your wife or husband, consider IRS Innocent Spouse Relief and Federal Equitable Relief to protect you from paying a debt that's not yours. Innocent Spouse spares you of the accountability for paying tax, interest charges, and penalty fees if your spouse (or ex-spouse) erroneously reported items or left out items when filing the tax return. You can also remove Federal Tax Debt with IRS Equitable Relief. However, primarily cases of hardship will qualify. For the most part, if both of you are responsible for tax, interest, and penalty fees, you're not going to meet the requirements for Innocent Spouse Relief. One of the hardest of all ways you can try to get rid of Federal Tax Debt is via Innocent Spouse. In this article, we're going to discuss the facts of both Innocent Spouse and IRS Equitable Relief to help get rid of Tax Debt.
How Do You Get Approved for Innocent Spouse?
Innocent Spouse isn't easy to be accepted for. You're not going to be able to eliminate your Tax Debt if you aren't eligible for Innocent Spouse or Equitable Relief. Rather, the Internal Revenue Service can pursue you or your significant other for payment of the Tax Debt.
In order to qualify for Innocent Spouse, you must meet each of the below requirements:
- Your husband or wife (or former spouse) erroneously reported items on your joint return, causing a tax understatement. "Erroneous Items" will be included later.
- At the time you autographed the joint return, you were not aware of, and hadn't any reason to be aware of, a tax understatement. The IRS looks at this as "Actual Knowledge or Reason to Know," and this, too, will be discussed in depth.
- Considering each of the facts, it might be unfair to make you liable for the understatement of tax. This is called "Indications of Unfairness for Innocent Spouse," which is detailed below.
- If it's verified that you and your spouse (or former partner) shifted money amongst each other as part of a deceitful plan, your Innocent Spouse request won't be granted. This could be a scheme to defraud the Internal Revenue Service or other 3rd party, such as a creditor.
Innocent Spouse Relief Erroneous Items: Erroneous items are classified to be comprised of incorrect deductions or credits, and earnings that failed to be reported.
Actual Knowledge or Reason to Know: As specified by the IRS, you had real understanding or should've known of a tax understatement if:
- You in fact were aware of the understatement, or
- A reasonable individual in the same situation would have knowledge of the understatement
Indications of Unfairness: The IRS will consider all facts when making judgments for Innocent Spouse Relief. According to various identifying aspects, they will determine whether or not it's unfair to make you responsible for the understatement.
Equitable Relief: It's possible that you're going to qualify for Federal Equitable Relief if you don't qualify for Innocent Spouse. To qualify for Federal Equitable Relief, you have to give the details of your conditions to the IRS, and they has to concur that it would not be fair to make you accountable for the understatement or underpayment of the taxes. Typically, only cases of extreme hardship are approved for IRS Equitable Relief.
2 of the most common ways individuals try to Remove Tax Debt are through Equitable Relief and Innocent Spouse. Find out if you meet the requirements for these plans by contacting a tax debt professional right now.
