After marriage, you tend to share your liabilities and responsibilities with your spouse; filing tax return jointly is one such step taken to reduce your tax debt. However, it can become an issue when your spouse makes a mistake consciously or unconsciously in the tax return. The Internal Revenue Services (IRS) will hold you also responsible for the tax debts of your spouse. Tax debts can be formed either due to the exaggeration of the exemptions or undisclosed income.
Joint and Several Liability
As per the rules of IRS, any joint tax return is subjected to certain criteria. One criterion is that both the spouses are jointly responsible for the tax, interest or penalty on tax dues even in the event of legal separation. Another is that even when your spouse does a mistake, you might be held responsible for all the tax debts and it becomes your liability then.
Relief from Spousal Liability
You can opt for relief from spousal tax debts through three methods. One is through Innocent Spouse Relief, second method is by Separation of Liability, and last one is through Equitable Relief. However there are some strict eligibility criteria to pledge relief through any of these methods.
- Innocent Spouse Relief - In order to get relief with Innocent Spousal Relief scheme, you have to establish the fact that you were unaware of the understatement of tax by your spouse at the time you signed the joint tax return.
- Separation of Liability - You may seek relief under this category if you are ready to divide the understatement of tax among yourselves based on your income and deductions and you are no longer married to your spouse with whom the joint return was filed.
- Equitable Relief - This relief is awarded when IRS considers many things such as abuse experienced from your spouse, current marital status, current financial hardships, and ignorance while signing the joint return, mental and physical health and many such qualifying factors.
Getting Legal Advice
Taxes can become heartache if you do not take appropriate action in appropriate time. The rules and regulations can force you into a financial crisis for no mistake of yours. Hence, you have to take the services of a tax resolution company or a taxation attorney who can help you in getting out of these debt liabilities in a legally correct manner.
