This is option to resolve some times when a taxpayer shouldn’t be held liable for the tax debt they owe because it was the spouse’s fault -Innocent Spouse Relief / Separation of Liability Relief / Community / Equitable Relief
There are situations, known as innocent spouse relief, where a spouse files a tax return without the other “innocent” spouse even knowing, i.e. spouse’s signs for the other taxpayer or e-files it and doesn’t get other spouses signature, and the “innocent” spouse didn’t know and didn’t have reason to know about the income on the tax return and that innocent spouse then shouldn’t be held liable for that tax debt, the penalties and interest.
Also there are cases, known as separation of relief, when an additional tax was assessed and the innocent spouse is now divorced, separated or didn’t live with the other spouse the last 12 months and the innocent spouse didn’t have actual knowledge of the errors and omissions of the other spouse and thus should only be held liable for any errors and omission, if any, relating to the innocent spouse’s income or expenses that were responsible for. Through separation of relief tax, penalties and interest can be removed from the innocent spouse’s liability for the potion which was the responsibility of the other spouse.
Residents of some states have to comply with community property laws, which generally states that income of one spouse is the income of the other spouse and thus should be reported, at least a portion, on the other spouse’s separate return, even if file married filing separate. There are cases where if one can show that you had no reason to know and didn’t know about your spouse’s income and thus didn’t report on your married filing separate return then you shouldn’t be liable for this community income, this is known as “community relief.”
In some instances, the tax debt was not attributable to your earned income or expenses you and you may have known or had reason to know of the tax problem or maybe not but because of hardships, spousal abuse, or other issues it would be unfair “not-equitable” to hold you liable for your spouse’s taxes the IRS may say not liable. This is known as equitable relief.
Relief from tax debt that is your spouse’s wrongdoing is complicated. As such, hiring Tax Law Center to assist is a must.