When a married couple files a joint tax return, they are both equally responsible for the information on that return. If the joint return is inaccurate and the tax responsibility is understated, both individuals are responsible for repaying the resulting tax debt. However, if one spouse is able to demonstrate that they did not know about the inaccuracies on the return and that it would be unfair to hold them responsible for the debt, the IRS may grant them Innocent Spouse Relief. The IRS would then hold the other spouse entirely responsible for the tax debt. Most cases of Innocent Spouse Relief involve separation or divorce.
“We get a number of clients who find themselves in tax debt because they filed jointly while separated from their husband or wife, and then find out that their ex underreported income or committed some kind of tax fraud,” Lori Hall, Debt Analyst at Tax Defense Network, observes. “They’d have no way of knowing that anything was wrong with their tax return, and yet they would still be held liable for it. This is why the IRS has Innocent Spouse Relief.”
Tax Defense Network client Dena P. was in a similar situation. Dena separated from her husband, but he convinced her they were required to file jointly. Unbeknownst to her, he had taken money out of his 401k and failed to report it on their tax return. Years later, the IRS sent Dena notification that she owed over $20,000.
“Dena was terrified,” Lori recalls. “She did not feel that the tax debt was hers or that she should have to pay it back. And rightfully so!”
The licensed tax professionals at Tax Defense Network knew Dena was a perfect candidate for Innocent Spouse Relief because she knew nothing about her ex-husband’s withdrawal from his 401k, had no reason to know about it, and because she did not benefit from the withdrawal.
“They believed in me and worked very hard on my case,” a relieved Dena says. “I was treated like a princess!”
Tax Defense Network took care of Dena and made sure she was not held responsible for her ex-husband’s tax debt. They petitioned the IRS on her behalf and made sure she was granted Innocent Spouse Relief.
Tax Defense Network is a national tax resolution company with an A+ rating with the Better Business Bureau. Its team of licensed tax professionals has resolved over $120 million in tax debt and has helped almost 100,000 taxpayers with their tax problems.