Married couples in Texas will often file a federal tax return under the category of married filing separately. When filing jointly, the standard deduction will be higher than when filing separately, which may lead to reduced tax obligations on the combined income. When filing jointly, both spouses are responsible for the debt. Such might be the case even when one spouse’s commits questionable actions on the tax return. Still, the other spouse might seek relief through an innocent spouse claim.
Claiming innocent spouse relief
One spouse may not tell the other spouse the truth regarding reporting income. Therefore, a spouse could sign their name on a tax return that underreports income. Also, one spouse may make false deductions on a Schedule C form related to their profit or loss from a business. The other spouse might not know what is legitimate or inaccurate. However, if an audit occurs, both spouses would be liable for additional taxes, interest and penalties.
A spouse who did not know about an error or other issue on the tax return may claim innocent spouse relief. Making a claim involves filing and submitting the appropriate form to the IRS.
Requesting innocent spouse relief
Completing the required forms timely and accurately could help someone seeking relief under innocent spouse statutes. The IRS representative who receives the request will make a decision based on applicable tax law. The IRS may request more information in certain situations, and a proper response becomes necessary to address the concerns.
If the decision proves unfavorable, that does not mean the process is necessarily over. Taxpayers may appeal an adverse decision, which might result in a reversal of the initial negative outcome.
