IRS Audit Representation

Innocent Spouse Relief
When individuals file a joint tax return, each spouse is equally liable for all tax, penalties and interest that come about from that particular year. The IRS or states can legally go after both spouses or just one spouse for the entire tax amount that is due even if the couple is divorced and the divorce decree states that one individual is responsible for the taxes owed.
The IRS created innocent spouse relief because it realizes that there are times when it would be unfair to hold both joint filers equally liable for the tax liability that was created. There are three forms of spouse relief that will allow one spouse to get out of paying their spouse or ex-spouses tax. If an individual does not qualify for one, it is possible that they will qualify for another type of relief.

• How do I qualify for innocent spouse relief?
• In order to qualify for innocent spouse relief, you must meet all of the following requirements:
  You filed a joint return that has a tax deficiency that is solely attributable to your spouse's income, tax deductions, credits, or properties and was omitted or listed incorrectly in a return.
  You establish that, at the time you signed the joint return, you did not know that there was an understatement or improper listing of tax.
  It would be unfair to hold you liable for the understatement of tax.
  Separation of liability — This relief is similarly available if there is an understatement of tax or a deficiency on a tax return. The liability for the understated tax may be separated such that the requesting taxpayer is granted relief from the liability. In order to qualify for this relief, the requesting taxpayer must be divorced, legally separated, or living apart from the spouse or former spouse at all time during the 12 months prior to the filing of the request. Separation of liability applies only to amounts owed that are not paid, and the IRS will not refund amounts that have already been paid.
• Equitable relief — If the taxpayer does not qualify for separation of liability or innocent spouse relief, equitable relief may be requested in which case the IRS may determine that the taxpayer should not be held liable for any understatement or underpayment of tax after taking into account all of the facts and circumstances. This type of relief is primarily requested when the requested taxpayer believed that the spouse or former spouse would pay the tax due on a joint tax return but failed to do so.
  As part of their investigation, the IRS is required to contact the spouse or former spouse of the taxpayer that is requesting relief from liability. The IRS must allow the spouse or former spouse to provide information that may assist in determining the extent of relief from liability. However, the IRS will not provide information to the spouse or former spouse that could infringe on the privacy of the requesting taxpayer.
  If that taxpayer is a victim of domestic abuse and fears that filing a request for relief will result in retaliation, the IRS can be alerted to the sensitivity of the requesting taxpayer's situation. While this does not result in special consideration, evidence of abuse is one factor that the IRS considers for certain types of relief.
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