Injured and Innocent Spouse Relief

Injured and Innocent Spouse Relief

 

Injured Spouse

Injured spouse is one whose share of federal tax refund was reduced to pay his/her spouse’s debt. Refund may be applied to the following overdue debts like;

ü  Past-due child support

ü  Debts to federal agencies

ü  Federal or State income tax obligations

ü  State unemployment compensation debts

ü  Student Loan

If you are not legally responsible for these debts, you may get the part of your refund by filing Form 8379. Most of the debts should be taken before the marriage.

You have to file form 8379 within 3 years of the original tax return filed or within 2 years of taxes paid whichever is later. If you have not filed the taxes, then you must file within 2 years from the date taxes were paid.

If IRS reduces your refund they will send you a notice of offset from them showing the following:

ü  The original refund amount

ü  The amount applied to your spouse's debt

ü  The agency receiving the payment

ü  The address and phone number of the agency

To request injured spouse relief, file Form 8379, Injured Spouse Allocation. You can file it with your tax return by mail or electronically. You can also mail it separately when you receive notice that your refund was applied to an outstanding debt.

Mail Form 8379 to the same Internal Revenue Service Center where you filed your original return. (If your original return was electronically filed, mail Form 8379 to the Internal Revenue Service Center for the area where you live.) Attach a copy of all Forms W-2 and W-2G for both spouses, and any Forms 1099 showing federal income tax withholding.

Community Property State

If you lived in a community property state during the tax year, the IRS will divide the joint refund based on state law. Community property states are

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin.

Innocent Spouse

Innocent spouse is one who did not have knowledge of the understatement of tax liability of his/her spouse. One may qualify as an innocent spouse if s/he signed a joint income tax return but were not aware that his/her spouse understated the tax liability.

Both spouses are individually responsible for the entire tax due on their joint return. However, if taxes were understated because one spouse omitted income or claimed improper deductions or credits without other’s knowledge, an exception may be made: A spouse in this situation may qualify as an innocent spouse. You may be eligible to claim innocent spouse relief if you did not know and had no reason to know of the understatement of tax and if, considering all the facts and circumstances, it would be unfair to hold you responsible for the understatement.

To request innocent spouse relief, you need to file Form 8857. 

Reference:

(IRS Publication 971). 

( U.S. Code § 6015 - Relief from joint and several liability on joint return)

 

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