Innocent Spouse Tax Relief in Connecticut
In marriage, we place a large amount of trust on our spouses. When filing income taxes jointly, one spouse frequently completes the taxes while the other simply signs the form. However, if that spouse makes an error on the tax forms, fails to file or fails to pay taxes, both the spouses will be held liable for the outstanding tax debts.
This joint and several liability extends not only to married couples, but also to couples who are now divorced or separated. Even if your divorce decree states that your former spouse will pay all tax debts, the tax authorities can still come after your assets and income to pay off the unpaid or improper tax debt.
If you were unaware of the errors your spouse or former spouse made to your joint taxes, it may be possible to seek relief. This is known as innocent spouse relief, and it is available to spouses who had no knowledge and no reason to know that your spouse completed your taxes in error.
Experienced Legal Counsel for Tax Debts
If you are an innocent spouse who needs relief from tax debts, our attorneys can help you. Since 1983, the legal team at The Law Offices of Neil Crane, LLC, has assisted clients with tax and debt relief issues in Connecticut. We can answer your questions about innocent spouse relief and guide you through the legal process so you can avoid paying for your spouse's mistakes.
The key to innocent spouse relief is a properly prepared and well-presented application for relief. To speak with a lawyer about innocent spouse tax relief in Connecticut, contact our firm online, or call us at 203-230-2233 or toll free at 888-249-3027.
Relief From Collection By Innocent Spouse, Separation of Liabilities and Equitable Relief
There are three types of relief available to spouses with joint tax debt: innocent spouse, separation of liabilities and equitable relief. Innocent spouse relief requires "lack of knowledge," and proof that:
- The other spouse caused the understatement of tax
- The requesting spouse didn't know or had no reason to know of the understatement
The election requires an application be filed within two years of collection activity against the potentially requesting innocent spouse through the filing of a Form 8857.
Proving what was known, what reasonably should have been known, when it was known, and if you benefited requires the strong advocacy of legal counsel. In order to be successful in an innocent spouse application, you need to make a full presentation of all the facts based upon the most up-to-date new developments and case law addressing the terms that qualify under the Innocent Spouse Relief IRC §6015(b).
Separation of liability is available to spouses who become divorced or legally separated after filing a joint return. This allows the termination of joint status and joint liability by providing a separation of your debt from your spouse's unpaid tax debt by proving that you were:
- Legally separated from your spouse at time of requesting relief
- Not living with spouse within one year of requesting the relief
- Separately liable from your ex-spouse
This form of relief also requires a prompt well-prepared application submitted within two years of IRS collection activity.
Equitable relief may still be available when traditional innocent spouse or separate liability options may not. This requires thorough proof that under all the facts and circumstances, it would be unfair or inequitable to hold the requesting spouse liable for an unpaid tax or deficiency.
Are You Eligible for Innocent Spouse Tax Relief?
Innocent spouse tax relief is available for both state and federal income tax debts. The rules and requirements for innocent spouse relief are similar before the IRS and the Connecticut Department of Revenue Services (DRS). To be eligible for this type of relief you must meet specific requirements, including:
- Joint filing: Your taxes must have been filed jointly.
- Understated and erroneous taxes: The taxes your spouse stated on your tax forms must have been less than you actually owed. This miscalculation also must have been caused by an error such as failing to report a source of income or an incorrect deduction, basis or credit.
- No knowledge: You must be able to show that you had no knowledge of your spouse's error and that you had no reason to know.
- Unfairness: Finally, the facts must show that it would be unfair to hold you personally liable for the tax debt caused by your spouse's error.
No More Two-Year Limit
In the past, an innocent spouse had two years from the time the IRS sent notice of unpaid or unfiled taxes to seek relief. Recently, the IRS has removed that time limit, and made other equitable relief available beyond the two-year period. Additionally, if your claim was formerly denied because of this time limit, you can reapply to the IRS for innocent spouse relief.
Contact Our Lawyers About Innocent Joint Filer Tax Relief
We can help you get the relief you need from tax debt. Call us at 203-230-2233 or toll free at 888-249-3027, or contact us online for a free initial consultation. We have office locations in Hamden, Bridgeport, Ridgefield, Waterbury and Rocky Hill.
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