For many married couples, filing a joint tax return provides various benefits and advantages. Unfortunately, however, spouses can then be held jointly and severally liable in the event that the tax is understated. One spouse can request relief from the IRS by applying for separation of liability. If the IRS grants the request, the understated tax will be allocated between the spouses, reducing the liability for the innocent spouse. The IRS does not always grant the request however, depending on the circumstances surrounding the understatement of tax.
Situations Where a Separation of Liability Request May Be Denied
When might a request for separation of liability be denied by the IRS? The following are three examples:
- The IRS proves that you and your spouse transferred assets with the intent of avoiding payment of tax.
- Your spouse or former spouse transferred property to you in order to avoid tax or the payment of tax.
- The IRS proves that at the time you signed your joint tax return, you had actual knowledge that any items giving rise to the deficiency and allocable to your spouse were incorrect.
Fortunately, even if an innocent spouse claim was previously denied by the IRS, if you later discover additional information, you can file a second claim. The IRS will then reconsider your claim based on the new information. We can help guide you through this process in order to find a successful resolution to your IRS tax problem. Learn how we have helped our past clients by checking out our client testimonials today.