The IRS recently provided revised rules under which a taxpayer may receive relief from joint tax liability incurred when filing a married-filing-joint income tax return.
A new ‘streamlined’ procedure is available for requesting spouses who meet the requirements of being no longer married, that they would suffer economic hardship if relief is not granted, and did not know nor had reason to know of the understatement of tax or omission of community property income attributed to the non-requesting spouse. Additional leeway is provided if a requesting spouse suffered abuse from the non-requesting spouse to the extent that the requesting spouse was under duress on signing the tax return or that the challenge of any item on the tax return would subject the requesting spouse to additional abuse.liability incurred during marriage. Taxpayers filing using the ‘Married-Filing-Joint’ filing status are jointly and severally liable for the income tax liability. This means that each taxpayer is considered 100% liable for any tax due. In certain cases, a spouse may be relieved of the joint liability when petitioning relief under an ‘Innocent Spouse’ relief claim.
Refunds are also now available to the requesting spouse, subject to the limitation that the amounts paid must have come from an installment agreement paid by funds solely of the requesting spouse.
A request for innocent spouse relief may be requested during an expanded period. This period, previously 2 years from an IRS collection action, is now extended t0 any time in the ten years after tax is assessed.
If you have any questions regarding a claim for Innocent Spouse Relief, please contact our office and ask to speak with Aaron Blau, EA, CPA or Germaine Lee, EA.
Summarized from ‘News Notes’ published in The Tax Advisor, December 2013 page 803