TAX SETTLEMENT & OFFERS IN COMPROMISE

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INNOCENT SPOUSE

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HANDLING TAX DEBTS THROUGH INNOCENT SPOUSE RELIEF

 

Three Types of Innocent Spouse Relief

 

The three general types of Innocent Spouse relief are Innocent Spouse, Allocation of Liability and Equitable Relief. 

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Innocent Spouse

 

If your spouse or former spouse improperly reported or omitted items on your tax return, you may qualify for innocent spouse relief.  In order to qualify for innocent spouse relief, you must meet the following conditions:

 

1. You filed a joint return which has an understatement of tax due to your spouse or former spouse improperly reporting or omitting items on the tax return.

2. At the time you signed the joint return you did not know, and had no reason to know, that there was an understatement of tax.

3. It would be unfair to hold you liable for the understatement of tax based on all the facts and circumstances.

 

Relief By Separation of Liability

 

The understatement of tax on your joint return is allocated between you and your spouse or former spouse based on the amount for which you are responsible and is only available for unpaid liabilities resulting from understatements of tax.  In other words, refunds are not permitted.

 

To request relief by separation of liability, you must meet either of the following requirements:

 

1. You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief.

2. You were not a member of the same household (explained next) as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file for relief by separation of liability.

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You must be able to prove that you meet all of the requirements for separation of liability and you must also establish the basis for allocating the erroneous items.

 

Equitable Relief

 

In order to qualify for equitable relief you must meet the following conditions:

 

1. You are not eligible for innocent spouse relief, relief by separation of liability, or relief from liability arising from community property law.

2. You and your spouse or former spouse did not transfer assets to one another as part of a fraudulent scheme.

3. Your spouse or former spouse did not transfer property to you for the main purpose of avoiding tax or the payment of tax.

4. You did not file or fail to file your return with the intent to commit fraud.

5. You did not pay the tax.

6. It would be unfair to hold you liable for the understatement of tax based on all the facts and circumstances.

7. The income tax liability from which you seek relief generally must be attributable to an item of the spouse or former spouse with whom you filed the joint return unless certain other conditions are met.

 

Get a Game Plan!

 

A well devised plan for discharging tax indebtedness is important and almost impossible to achieve without the help of an experienced professional who understands the process or various processes that may be involved, what is possible and what is not, and the full range of remedies available.  Remember, there are often multiple solutions to the settlement of a tax debt.  As a seasoned tax attorney, John Kachmarsky and the staff at the Law Office of John Kachmarsky have that experience and knowledge.

 

Contact our Charleston, South Carolina law office today to make an appointment for an initial consultation.