No one is thinking about taxes on their wedding day. And no one ever intends to get into tax debt. However, when you find out that your spouse has back taxes, or tax debt, things can get messy. For many people in the US, even though they always file and pay their taxes on time, they get into trouble with the IRS because of a spouse.
So what exactly happens when you’ve paid your taxes, but your spouse hasn’t? The IRS isn’t out to get you; in fact, they have multiple options to help give relief to people in this situation. And the answer to your tax liability depends on the details of your relationship and your tax returns.
Determining Tax Liability for Your Spouse’s Tax Debt
Although you will probably never forget the date of your wedding, there will be a few other dates that will be increasingly important when you are involved in tax debt. In general, the way the IRS determines who is liable for tax debt is by looking at the dates of debt, the dates of marriage, the status of your relationship, and the status of your tax returns.
These scenarios generally fall into one of the three following categories.
If Your Spouse Owes Back Taxes Before You Married
If your husband or wife didn’t pay their taxes before you got married, then you are not liable for their tax debt. This means you are still eligible for your tax refund.
However, be sure to file your taxes separately. If you file your taxes jointly, you may become liable for their debt.
If You Filed Jointly the Year Your Spouse Incurred the Back Taxes
If you filed taxes jointly and your spouse did not pay correctly, you may be held liable. In the eyes of the IRS, a couple who jointly files acts as one entity, which means the debt falls on both of you.
However, the IRS knows that sometimes the tax debt is one-sided, even with joint tax returns. For these cases, the IRS has options to help you find relief. Here are three general questions they will use to determine the tax liability:
- Did you know about the filing issues and tax debt?
- Are you still together?
- Did you benefit from the fraudulent tax return?
If you can submit proof that you did not know about filing issues and that you weren’t involved, the IRS has options for relief. The relief from the IRS may make you eligible for full tax debt forgiveness.
If You Were Separated from Your Spouse but Filed Jointly
This option applies if you filed jointly with your spouse the same year that they incurred tax debt, but are separated. If you and your spouse live separately and are heading for divorce, you may qualify for “Separation of Liability Relief.”
Your Options When Your Spouse Owes Back Taxes
Your spouse might have tax debt from child support payments, student debt, court judgments, or state debts. If you find yourself in trouble with the IRS through no fault of your own, make sure you look into each of the following options.
Call the Tax Debt Relief Hotline
The Tax Debt Relief Hotline is designed to help you understand how things work and take the right steps. Taxes can be confusing, and when you are overwhelmed and scared by tax debt, you should call the hotline. You’ll be put in contact with someone who deals with the IRS every day and knows exactly how to help you. For free expert advice, call (888) 452-7841.
Innocent Spouse Relief
If you qualify for Innocent Spouse Relief, you will receive full forgiveness of your tax debt. However, you can only qualify for this if you can submit proof that you had no knowledge that your spouse incurred tax debt.
You can start by submitting a Request for Innocent Spouse Relief. If the IRS decides that you have enough evidence, they will calculate which taxes are forgiven.
You need to complete this form as soon as you find out about the tax debt. It is only accepted within two years of the date you are notified that the IRS is attempting to collect tax debt.
Separation of Liability
Separation of Liability applies to you if your spouse hasn’t paid the taxes and if you are legally separated or divorced. If you are approved, the IRS will effectively separate the unpaid taxes on your joint return so you are only responsible for the tax allocated to you.
You will need to complete the Request for Innocent Spouse Relief form, and the IRS will determine if you are eligible for this option.
Equitable Relief
Equitable Relief is considered for spouses who don’t qualify for innocent spouse relief or separation of liability. This is a great option for relief if you did know about the tax debt.
For instance, if you were a victim of domestic violence and signed the joint tax return out of fear, you may be eligible for equitable relief. If you do qualify, you will have your taxes separated from your spouse, similar to the Separation of Liability option.
Injured Spouse Relief
Injured Spouse Relief applies to you if your money was taken from you, as opposed to committing tax fraud without you knowing.
A common example is when you are eligible to receive your tax refund, but the US Treasury Department intercepts it because of your spouse’s tax debt. In this case, you would need to file and submit the Injured Spouse Allocation Form.
You need to file a separate form for each year that your refund was affected by the tax debt. In addition, you can only file within three years of the original due date.
Finding Relief Options for Your Spouse’s Tax Debt
Understanding taxes can be difficult, especially if you don’t have all the information from your spouse. The Tax Debt Relief Hotline was created to help people in your situation. Calling the hotline is free, and you can ask questions to help you understand what to do in order to get the right relief.
