When you’re applying for spousal relief, you will need to prove that it would be unfair to hold you responsible for your spouse’s tax debt. The IRS wants to know about your specific circumstances to determine if the tax debt should be removed from your name. Here is a list of items to focus on when making a request for relief:
What is your marital status?
If you are still married, you will not qualify for separation of liability relief unless you have been living apart from your spouse for at least a year. For innocent spouse relief and equitable relief, the IRS will be critical of a situation where you continue to stay in a situation where you’re incurring more liability. So, while not required, it does make a better case for you to have been divorced or at least separated from your spouse before making the request for relief.
Is there a history of domestic abuse?
Were you forced into signing the tax return? The IRS considers situations where you are not free to do something other than file a joint tax return when abuse is present in your relationship. Being threatened, forced, or coerced into signing a return or making statements about the filing to an auditor is information that is very important to your request for relief. This can be a very sensitive topic and information you may not want to share. You should know that, for your safety, you can request that your address, employer, phone number, new name, and other identifying information can be protected through the request process.
Do you have a divorce decree that says who is responsible for the tax liability?
If you have some agreement or court order showing that you should be absolved of the liability, this will go a long way in your request for relief. However, if nothing is mentioned or you are the one to pay the tax in the divorce decree, then this will not weigh in your favor. Also, did you have a reasonable expectation that your spouse would actually pay the taxes owed if he/she was ordered to pay the tax? Just because your spouse was required by the court to pay the tax, the IRS requires that it be reasonable to assume he/she would pay the taxes.
Did you know that your spouse had an “erroneous item” on your joint tax return?
To the extent you had no idea of the problem, the IRS will consider relief to you. If there was any chance that you should have known taxes would be due, you won’t be eligible for innocent spouse relief; however, to the extent you may have known, but had no control over it or weren’t absolutely sure, the IRS can grant you other relief based on fairness.
Did you receive benefits from not paying the taxes?
If you were able to live a better lifestyle that can be traced to not having paid taxes or having underreported income or over-reporting expenses on your tax return, the IRS will be critical of allowing you relief. But, if your spouse kept the money and only used it for his/her benefit, you may be eligible for relief.
If you are required to pay the taxes, will you have an economic hardship?
Your request will include information about your income and expenses so the IRS can determine if you will not be able to meet your living expenses if it requires you to pay the taxes due. There are federal standards for living expenses that the IRS uses to calculate whether you have a hardship. Just because it will simply affect your living expenses will not be enough to prove this factor. You will need to show that your specific situation (age, work history, education, extraordinary expenses) will make it difficult to pay taxes of your spouse.
Have you filed your returns and paid your taxes on time?
The IRS will want to prove that you are otherwise compliant with all of your tax responsibilities. If you have past due taxes or returns that are not related to the period for which your asking for relief, the IRS will be hard pressed to grant you relief. But, if you’ve been diligent in all other years, the IRS will consider you’re making your request in good faith.
Basically, the IRS will give you a thumbs up or down to see if each factor applies to you and whether your situation warrants spousal relief. Each factor is looked at independently and there is not one that weighs more than the others. If your circumstances show it would be unfair for you to be equally responsible for the tax debt, the IRS will grant you relief.