Couples filing joint returns are held equally responsible for the tax return and the payment of appropriate taxes. In some cases, though, one spouse has underestimated the tax liability and, unknowingly, the other spouse signed the return. In this case, the innocent spouse may not be responsible for paying the additional taxes and penalties. The rules governing the application of the Innocent Spouse solution are somewhat convoluted but they can be boiled down into the following:
The innocent spouse did not know there was an understatement of taxes and would have no reason to know that there was an understatement of taxes.
All or some of the understatement was the responsibility of and can be attributed to the other spouse.
It would be unjust to hold the innocent spouse responsible for the actions of the other spouse.
There are numerous techniques that can help to protect current and former spouses from liability that was incurred in a prior marriage. Call us today for a free consultation with a Tax Professional to see if the Innocent Spouse exception is the best option for you. Worry Less and Live More!
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