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Spousal Issues

The general rule in the tax code when married couples file joint returns is that both parties are jointly and severally liable for any resulting tax debt. That means the IRS can hold one spouse responsible for the entire balance or both parties partially responsible. Married couples that file joint tax returns can sometimes place one spouse at a disadvantage because of debts owed by only one spouse. A spouse who is negatively affected by a debt owed by their spouse might be able to get relief from that obligation by filing a request for injured spouse or innocent spouse relief.

Innocent Spouse

A request for innocent spouse relief is based on the theory that penalties that come from taxes being underpaid should fall solely on the shoulders of the spouse who caused the underpayment in the first place by not properly reporting income or claiming improper deductions or credits. Another form of relief is to ask for a separation of liability, which makes each spouse responsible for the liabilities (and penalties) based on their individual income. There does not need to be any allegation that one spouse provided incorrect or incomplete information that caused the tax debt and penalties to request this type of relief. A third form of innocent spouse relief is called equitable relief. Equitable relief means the
taxpayer’s situation doesn’t really meet the requirements of the other categories of innocent spouse relief, or if the amount of tax reported is correct on your joint return but the tax wasn’t paid with the return.

Injured Spouse

Injured spouse relief relates to the application of refunds to a tax debt. If one spouse has debts like child support arrears or student loans, when a joint tax return is filed and shows a refund is due, that refund is automatically applied toward the child support or student loan debt, even if the income that generated the refund is generated by the non-owing spouse. An injured spouse relief request asks the IRS to split the refund, keep the portion due to the spouse who owes the debt, and send the other spouse their share of the refund.

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