Due to the tax benefits associated with filing a joint return, many married couples make the decision to file jointly. When filing a tax return as a married couple, both spouses are jointly and severally liable for any tax, interest, or penalties that may be assessed. This is the case even if the divorce ruling says that one ex-spouse must pay the other for any tax debt incurred through joint returns. Even if the other spouse did all the earning, they may still have to split the tax bill 50/50. Some spouses may be exempt from paying tax, interest, and penalties on a combined return. The sufferer can choose from three different forms of relief:
Innocent Spouse Relief
If your spouse made a mistake on your tax return, you may qualify for innocent spouse relief and be exempt from paying any back taxes, interest, or penalties. An individual does not meet the requirements if he or she knew or should have known about the inaccuracy that caused the tax to be due on the return. Therefore, it would be unreasonable to hold the other partner accountable for the tax bill under the existing circumstances.
Relief By Splitting Of Liability
The IRS will split the underpayment of tax (plus interest and penalties) from a joint return between you and your current or previous spouse if you qualify for this relief. Similar to innocent spouse relief, an additional tax assessment is required to receive this relief. One partner says they were completely unaware their tax return contained a mistake. Once again, it all depends on the details.Abused partners may be able to prove that they were too terrified to dispute their partner’s tax return. The requestor must be legally single or separated from their spouse.
If you don’t qualify for innocent spouse relief or for a separation of liability, this sort of relief may be available to you. The IRS looks at a number of issues when deciding whether to grant equitable relief, including whether or not there was awareness, domestic abuse, separation/divorce activities, benefit, health status when signing the return, and future tax compliance. The point is that there is no hard and fast rule for who meets the criteria.