When a Former Spouse Owes Back Taxes

Joint and several liability of taxpayers filing jointly

Many married couples choose to file joint tax returns to take advantage of lower tax liabilities. Along with the benefits, however, each spouse accepts full responsibility for the taxes owed by the couple. This concept — called joint and several liability — means that the IRS can pursue both spouses for repayment of outstanding taxes, interests and penalties on one spouse’s income. This obligation undertaken by each spouse during the marriage continues even after divorce.

Relief from the IRS for innocent spouses after divorce

A taxpayer may face a hefty bill for a former spouse’s mistakes — such as inaccurately claiming salary, deductions and credits on the couple’s joint tax return on income the negligent spouse earned. This tax liability cannot be settled in family law proceedings because the IRS is not held to the terms of a couple’s divorce decree. The innocent spouse must apply directly to IRS for relief.

Eligibility for innocent spouse relief

Innocent spouse relief releases a taxpayer from liability if the debt arose because a spouse failed to report income or inaccurately reported deductions and credits. To qualify, the innocent spouse must prove lack of knowledge of the understated taxes and file a request for relief within two years from the date the IRS attempts to collect the debt. The IRS considers whether the facts and circumstances of an individual case warrant relief — for example, if the innocent spouse did not receive a benefit from the understated tax. If the innocent spouse request is successful, the negligent spouse assumes full responsibility for the entire debt.

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