New IRS Guidance For Innocent Spouse Procedures

Often times a spouse, or former spouse, may receive an enormous tax assessment from the IRS and have no idea why.  It might just be that the tax liability is the result of tax issues created by the other spouse (or former spouse). If the circumstances are right there may be relief under procedures recently revise by the IRS. This relief is generally referred to as Innocent Spouse Relief.


In order to qualify for relief under these procedure, the innocent spouse must meet certain threshold requirements, which are:

1. A joint return was signed;

2. No other relief provision applies;

3. A claim for relief is timely filed;

4. No assets were exchanged between the spouses as part of a fraudulent scheme;

5. The non-requesting spouse did not transfer disqualifying assets to the requesting spouse;

6. The requesting spouse did not knowingly participate in filing the fraudulent return;

7. The income tax liability is attributable to the non-requesting spouse.


The IRS will streamline the request for relief if the requesting spouse is no longer married to the non-requesting spouse, is suffering economic hardship as a result of the tax liability, and the requesting spouse had no knowledge of or reason to know of the tax liability, including cases of abuse where the requesting spouse was controlled by the non-requesting spouse and kept from financial records.


In addition, the IRS will take into consideration whether the requesting spouse had reason to believe tax payments were made, which spouse may have the legal obligation for the tax liability as a result of a divorce decree, whether the requesting spouse significantly benefitted from a lavish lifestyle as a result of non-payment of taxes (except where there was also abuse), whether the requesting spouse made a good faith effort to comply with the tax laws, and whether the requesting taxpayer was in poor physical or mental health during the time the return(s) were filed.


If you need assistance with a tax liability created by your spouse or former spouse then schedule your free consultation by calling (480) 888-7111 [or submit a web request here].