Innocent Spouse vs Injured Spouse

An Innocent Spouse vs. an Injured Spouse are quite different.

Innocent Spouse vs Injured Spouse - What is the DifferenceAnytime both spouse are both signatories of a joint return, you are jointly and individually responsible for any tax liability – unless contested and one spouse’s liability is reduced or waived entirely for a particular tax reporting period.

How you can qualify as an Innocent Spouse

If taxes on your joint tax return were understated because your spouse omitted reporting some income, claimed improper deductions without your knowledge, the IRS may give you a “pass” on that tax liability by approving an “innocent spouse” exception for the misdeeds of your spouse. If you find yourself in such a circumstance, you may qualify as an innocent spouse and be waived of the tax liability that will be shifted to your spouse’s liability.

You may be entitled to Innocent Spouse Tax Relief

If you were totally unaware of the understatement of tax, the failure to report all taxable income, or had no hand in claiming dependencies that were not truthful, you may be entitled to innocent spouse tax relief. If is can be determined that your circumstances meet the criteria set forth by the IRS, and considering all the facts it would be unfair to hold you responsible for the understatement or other factors leading to a tax liability, you may be waived of some or all of your share of the those tax liabilities.

To request “innocent spouse relief,” you must file IRS Form 8857. If you are denied the request or fall short of the requirements for relief under the innocent spouse petition, there are other forms of tax liability relief afforded the taxpayer such as “equitable relief” or the “separate liability election” which might help you with your IRS matter. You can learn more about these alternatives in the IRS Publication 971, or consult a tax resolution lawyer for professional assistance.

Read more about Innocent Spouse Relief HERE.

You may qualify as an Injured Spouse

Remember. The IRS considers that both signatories of a joint return are jointly and individually responsible for any tax liability. That said, when a couple files one or multiple joint tax returns and then one spouse suddenly finds out that he or she is made to share the tax consequences of the actions of the other spouse from debts inured before they became a couple, that spouse is then adversely affected and may chose to seek relief from the “Injured Spouse” process.

Differences an Injured Spouse is to In Innocent Spouse

Different from an “Innocent Spouse,” where the tax consequences were a result of an understatement of tax liability by the other spouse, an “Injured Spouse” is part of a joint tax filing where you have a refund coming but but your spouse still owes money to the government for taxes incurred before the marriage or other non-tax-related debts that the IRS is the designated collection agency for. Because the IRS is the biggest “collection agency” in the America, many other U.S. government departments use the IRS as their collection agency and those departments request they the IRS deduct their claims from your joint tax refund. An example would be student loan liability that your spouse incurred prior to you becoming a couple. You may qualify as an injured spouse if your joint income tax refund was held back and applied toward your spouse’s past due liabilities for certain debts including:

  • past due federal taxes
  • unpaid state income taxes
  • unpaid child support payments
  • unpaid spousal support payments
  • unpaid student loans

When the IRS holds back that tax refund for joint tax return filers, one spouse can be considered to be the “injured party” or “injured spouse” if the past liability was created entirely by the other spouse.

The IRS has a process for Injured Spouses

The IRS has created a process for you to bring to their attention your claim of being an injured spouse. If the IRS is convinced that your circumstances warrant being deemed an “injured spouse,” the IRS might then provide relief to an individual who is unfairly asked to share the consequences of the other spouses’ transgressions or prior debts.

If you find yourself is such a situation, and consider your circumstance match those of an “injured spouse,” you can request to receive your share of the refund by filing IRS Form 8379. On IRS Form 8379 you break down your allocable share of items reported on your joint return. The IRS will then calculates the refund due you (if any) that you are due.

Read more about Injured Spouse HERE.

Innocent Spouse and Injured Spouse Links:

  • Publication 555, Community Property (PDF)
  • Instructions for Form 8379, Injured Spouse Allocation (PDF)
  • Form 8857, Request for Innocent Spouse Relief (PDF)
  • Instructions for Form 8857, Request for Innocent Spouse Relief (PDF)
  • Publication 971, Innocent Spouse Relief (PDF)

Get some help —Make that call!

San Diego Tax Resolution Lawyer at Paul Staley provides a no-obligation, confidential consultation and has appointments available for evenings and weekends. We accept all major credit cards and can make other payment arrangements so that we can help you get your tax problems straightened out without adding additional layers of financial burden on you and your family. To speak to Paul now, or to schedule a confidential free consultation call (619) 235-9645.