Holding Your Spouse Responsible for That Tax Debt
No one likes paying for someone else’s mistake, even if that someone is a spouse. If you’re married, you’ve undoubtedly had to clean up after your partner more than a few times. But when an IRS notice for a tax debt arrives to your surprise and dismay, you may not want to shoulder the burden.
In the event that your current or former spouse filed your joint tax returns, there’s always a chance he or she made a mistake. If this error – unintentional or otherwise – results in a tax debt, you’ll both be on the hook with the IRS. But you have a recourse in certain circumstances to place the blame squarely where it belongs – on your partner.
Married to Your Tax Debt
It’s important to first understand that the IRS considers a tax debt a joint responsibility between husband and wife. For this reason, you are just as liable for a delinquent tax balance as your partner, regardless of who actually created the debt. At least, initially.
This is also true if you divorce your spouse after the liability was created. A true insult to injury following a bitter split comes when the IRS informs you that collection action is being taken against you for a balance established by your ex. Fortunately, the IRS will consider amending their position if you are innocent of any responsibility for the debt in question.
Let’s consider a scenario. Your now-former partner handled all of the tax-filing duties on your joint returns. Unbeknownst to you, he or she was claiming non-existent dependents in order to receive an artificially-inflated tax refund. The IRS identifies the discrepancy, calculates the refund overage (plus penalties and interest), and promptly sends a notice requesting immediate payment. This series of events may seem unlikely, but similar scenarios happen every year.
Although the IRS will initially consider you equally culpable in the tax debt, you can claim relief. The Innocent Spouse program was originated by the IRS for just this purpose; to allow blameless spouses to avoid back tax collection efforts. If approved, you will bear no responsibility and face no reprisals for the unpaid liability.
In order to qualify for Innocent Spouse, you have to meet a couple of requirements. First, you will need to be able to verify that you had no knowledge of the filing error which resulted in the tax debt. In other words, handling your taxes truly wasn’t a joint endeavor.
Next, you’ll have to confirm that you had no reason to know about the mistakes which led to the liability. Put simply, you weren’t in on any improprieties together. The IRS will review your case, paying particular attention to your filing trends and the description of events you provide. If they agree with your assertion, the tax debt will not be yours to pay back.
Since presenting an argument for Innocent Spouse needs to be as bullet-proof as possible, you should consider consulting with a licensed tax professional. He or she can review your case and determine the likelihood of the IRS approving your request. You may ultimately enlist their services to present a carefully-constructed argument, to improve your chances of side-stepping that tax debt. No matter what tax problem your partner created, you shouldn’t have to pay the price for their mistake.