Limiting Your Liability for the
Return
If you file a joint
tax return with your spouse, both of you are legally responsible
for the accuracy of information shown on the tax return, as well as
for the entire amount of tax that is owed.
Spouses who are
separated often file separate returns simply because they do not have
access to complete financial information regarding the other party.
The IRS considers you liable for taxes on a joint return, regardless
of whether the divorce decree states you are not liable.
If
one spouse actually suspects that the other spouse is not being completely
truthful, he or she should consider filing a separate return to avoid
possible civil or criminal penalties.
It is possible, but
difficult, to obtain "innocent spouse relief" and avoid having to
pay taxes, interest and penalties on amounts that were actually owed
by the other spouse. You must establish that you did not know, and
had no reason to know, that your joint return failed to report some
income or claimed some erroneous deductions, credits, or other tax
breaks. This is a hard standard to meet, but if you do, you can be
relieved of liability for tax on that item.
To obtain innocent
spouse relief, you have to apply for it using IRS Form 8857, Request
for Innocent Spouse Relief, which can be obtained at www.irs.gov
or by calling 1-800-TAX-FORM. You must file this form as soon as
you become aware of a tax liability for which you believe only your
spouse or former spouse should be held responsible. However, you generally
must file Form 8857 no later than 2 years after the first IRS attempt
to collect the tax from you.
 |
Tip The law permits a taxpayer who is divorced,
or legally separated, and living apart from a spouse for at least
one year to limit his/her liability in instances where a former spouse
may have made erroneous statements on a previous joint tax return. To
make the election, the ex-spouse must file IRS Form 8857, and establish
the unpaid liabilities resulting from understated taxes that should
be allocated to the other spouse. The election can't be made if the
IRS demonstrates that the spouse seeking the election had actual knowledge
of the matter relating to the unpaid liabilities when the return was
signed. This is a more lenient standard than the innocent spouse
relief rule, but it is available only to spouses who have split up. The
divorced husband or wife has two years after the IRS begins collection
activities to make this election of separate liability, which will
excuse the innocent spouse from paying any additional taxes owed or
interest and penalties on the item(s) in question. Expanded time periods
apply for certain types of equitable relief. See a tax attorney if
you are seeking innocent spouse relief. |
|
© 2024 Wolters Kluwer. All Rights Reserved.