Spouses who have been the victim of their significant other’s tax problems should be a little more hopeful now that the IRS has made changes to the relief options. It’s not a moment too soon for those facing such issues as the IRS continues increased enforcement efforts during this economic downturn.
Last week the IRS issued newly proposed guidelines to make sure deserving innocent spouses may more easily be granted relief from tax liabilities that were out of their control. Specifically, the notice focuses on taking into account issues of spousal abuse and financial control when reviewing innocent spouse claims. This is an excellent addition because spouses who suffer from abuse in a relationship or simply enjoy no financial control over their assets often have little input on their tax returns, even if they sign them.
When you sign and submit a tax return with a spouse, you agree that you are jointly and severally liable for the income tax associated with the given tax year. This includes any issues associated with what income is reported, or is not reported, as well as other mistakes that are made whether purposeful or accidental. This presumption of liability must be overcome for the IRS to grant innocent spouse relief and common issues like assets held in joint or the spouse’s name were enough to trump claims that they, in fact, still lacked control.
Of course the best way to avoid tax liability is to be an active participant in preparation and review of your tax return. If that is not possible, at least the IRS is finally willing to consider some new contributing or mitigating factors. In the event that you are facing some tax issues however, I would still recommend that you contact a tax professional for help and guidance through the process.
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