If you’ve gone through or are going through a divorce you might be familiar with the term innocent spouse relief. If not, no worries, there is a great lawyer who offers up his knowledge free on his blog, James Wade. The Law Office of James D. Wade does a wonderful thing of sharing information freely and educating people. I cannot do it the justice that James Wade would be able to, but I will tell you what I know about innocent spouse relief.
Innocent spouse relief is an IRS program that was set up to decide, on a case by case basis, on whether or not to allow a taxpayer relief from filing jointly. It is important to remember that not every join return will be given this relief. There are only a few different reasons why you would qualify. One reason would be that there is a large item on your tax return that resulted in an understatement of tax due. The other reason would be that the tax return was filled properly, but a balance remains. It is not widely known, but innocent spouse relief is an umbrella for three types of relief. The first being innocent spouse relief, separation of liability relief and equitable relief.
The more specific innocent spouse relief is used when there has been an understatement of tax. Either due to a spouse failed to report income on time, claimed improper deductions or credits on your return. This type of relief is only applicable if you were not aware or did not have a reason to know. In terms of separation of liability relief, this is used when there has been an understatement of tax to split the liability between you and your former spouse. Lastly there is equitable relief. This type of relief only app;lice if neither of the above are applicable.
To learn more, I strongly recommend reaching out to James Wade at The Law Office of James D. Wade. He is always ready and willing to help people in need. In need of either representation, counsel or knowledge. He always has his clients best interest at heart and works to no other end. So, whether you’re going through a divorce. Or if you’re recently divorced and have questions about your upcoming tax returns, call James Wade today!