When spouses sign joint tax returns, they are jointly and severally liable for any unpaid taxes shown on the returns, and for any obligations (including additional taxes, penalties and interest) that may arise from a later audit or examination of that return.
Joint and several liability can result in some nasty surprises, frequently years later when a spouse (the so-called “innocent spouse”) first learns that the other spouse has omitted income or grossly overstated deductions belonging to the other spouse from the tax return, resulting in an unexpected tax bill.
The Internal Revenue Service announced changes to its prior policies on “innocent spouse” relief with respect to requests for relief under 26 U.S.C. Section 6015(f) (so-called “equitable relief”) in January 2012. Certain types of "innocent spouses" are likely to benefit from the revised factors and the method of weight the factors. This article identifies the applicants likely to benefit.
Applicants should give careful attention to the 6015(f) factors and applicable law, regulation, and precedent bearing upon those factors. Merely checking boxes on Form 8857 ("Request For Innocent Spouse Relief") and completing a few lines of text in explanation is unlikely to persuade a processing center reviewer, Appeals Officer, or the United States Tax Court, to grant relief.
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Tax Law Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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