When taxpayers file a joint income tax return, the law makes both you and your spouse responsible for the entire tax liability. However, one spouse may be able to avoid the tax liability through the Innocent Spouse Relief program. The innocent spouse can be relieved of responsibility for tax, interest, and tax penalties on the joint tax return.
Innocent Spouse Program-Most Common Circumstances:
- You filed a joint tax return which has a substantial understatement of tax directly related to grossly erroneous unreported taxable income or the incorrect tax deductions, tax credits or tax basis claimed by your spouse.
- You establish that at the time you signed the joint tax return, you did not know, and had no reason to know, that there was a substantial understatement of income or tax.
- Taking into account all the facts and circumstances, it would be unfair for the IRS and/or State Taxing Agency to hold you liable for the understatement of tax.
Just with any type of relief program, the taxpayer must be able to supply legitimate financial information and proof of reasonable cause.