filing a joint tax return with your spouse has many benefits, but can also cause problems. What if your spouse understates taxes? How about if deductions are made that should not be? Many people find this type of situation Particularly frustrating especially if divorced, separated, or deserted by their spouse. Despite misconceptions that both spouses are responsible for taxes due, there is a way out for innocent spouses.
Known as innocent spouse tax relief, innocent spouses can be relieved of paying tax, interest and penalties caused by a spouse or former spouse?s or wrongly omitted items reported on a tax return. If you believe you are qualified, file IRS Form 8857thMost people find Themselves filing IRS Form 8857 tax returns when items go on wrongly reported. These items may include on underreported income or incorrect deduction, property basis, or credits claimed.
Though you and your spouse being divorced or separated may work in your favor when applying, the IRS may find it fair to hold you responsible if you received a significant benefit from the tax understatement either directly or indirectly.You can receive innocent spouse tax relief though f you meet the right criteria. You may qualify if you:
file a joint return with an understatement of tax due because of your spouse.
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????Did not return and had no reason to know tax suspect that when you signed the understated.
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????Would be treated unfairly by being held liable for the understated tax.
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????Are not attempting to transfer property between yourself and your spouse as part of a fraudulent scheme.
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????Request innocent spouse relief within 2 years after the date IRS began collection activity against you for the unpaid taxes.
The IRS will notify
the other spouse if one spouse files a claim for innocent spouse relief. If one spouse is granted tax relief from preliminary determination, the other spouse may appeal the decision.
Other types of tax relief for spouses include relief by separation of liability and equitable relief. Relief by separation of liability is where understated tax, interest, and penalties are divided. If you do not qualify for the other types of tax relief, you may be able to get equitable relief. Equitable relief is where having to pay the tax would be unfair because you were not part of a fraudulent scheme, involved in tax evasion, and did not know what your spouse was doing. id=?article-resource?> Becky Schmitz is a certified tax specialist and enrolled agent problem resolution. Named 2006 Top Practitioner by the American Society of Tax Problem Solvers, she is the owner of cents Able Accounting , a tax problem- resolution firm. Able Accounting offers many cents tax problem resolution services including help with innocent spouse tax relief and setting up installment agreements/ p> Article Source
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