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Divorce and Taxes Owed: Who is Responsible for Tax Debt in a Divorce?

August 13, 2024October 15, 2021 by Brotman Law

Joint and Separate Liability for Taxes Between Divorced Spouses

When a taxpayer files separately, it is clear who will bear the burden of any tax liability assessed by the IRS. However, it may not be as intuitive when a tax return is filed on behalf of two taxpayers.

If a joint return is filed, the liabilities linked to this return are held joint and several between both taxpayers. (Internal Revenue Code, IRC 6013(d)(3)). This means you are both on the hook for the entire tax liability, until it is paid or released.

Do I Qualify for Innocent Spouse Relief?

August 12, 2024March 15, 2017 by Brotman Law

When you sign a joint tax return with your spouse, you are signing a legal document that holds both signatories in “joint and several liability” for the information on the return. In other words, each of you can be held liable for the entire tax amount, including penalties and interest if you underpay or do not pay at all.

But what if your spouse underpaid your joint taxes without your knowledge? What if, when your spouse prepared the tax return, he or she did not report one or more items, used the wrong tax basis, or did something else that caused your joint taxes to be underpaid?

Innocent Spouse Relief & Actual Knowledge

August 12, 2024January 15, 2014 by Brotman Law

Innocent Spouse Relief

This is the most commonly known form of relief, which can absolves a taxpayer from liability if their spouse or former spouse either did not report income, made an error in the calculation of income, or misapplied any deductions or credits that they were not entitled to.[1] Innocent Spouse Relief relieves a person of any tax, interest, and penalties associated with the account based on the preceding errors. However, the taxpayers are still held jointly and severally liable for any amounts that are not granted innocent spouse relief. The following requirements must be met in order for innocent spouse relief to be granted.

Theory of IRS Innocent Spouse Relief

August 12, 2024January 15, 2014 by Brotman Law

Because of certain benefits that filing jointly allows, many married taxpayers elect to file joint returns. However, filing a joint return carries the added burden of both parties being liable for the tax due. In addition, under the Internal Revenue Code, married taxpayers who file jointly are each liable for any additions to the tax, penalties, or interest associated with the account.[1] This is a concept in the law known as joint and several liability, meaning that the spouses are responsible for any tax liabilities together (jointly) but can be held responsible for them as individuals (severally).

IRS Innocent Spouse Relief Rules

August 12, 2024December 16, 2013 by Brotman Law

This article discusses the IRS innocent spouse relief rules. When couples file jointly, the law makes both parties responsible for the entire tax liability. Under tax law, this is called joint and several liability,[1] which is defined as two or more persons who share responsibility with respect to the same liability (i.e., event or act).

IRS Innocent Spouse Relief Requirements

August 12, 2024December 16, 2013 by Brotman Law

IRS Innocent Spouse Relief Requirements – What is Innocent Spouse Relief?

You and your spouse are jointly responsible for paying federal tax due, interest accrued, and any applicable penalties under the IRS innocent spouse relief requirements. This is especially true if you and your spouse filed a joint return. However, if you believe that your current or former spouse should be solely responsible for a particular item or the underpayment of tax on the joint tax return, then you may be eligible for Innocent Spouse Relief.

IRS Innocent Spouse Relief

August 12, 2024September 30, 2013 by Brotman Law

IRS Innocent Spouse Relief

This is the most commonly known form of relief, which can absolves a taxpayer from liability if their spouse or former spouse either did not report income, made an error in the calculation of income, or misapplied any deductions or credits that they were not entitled to. Innocent Spouse Relief relieves a person of any tax, interest, and penalties associated with the account based on the preceding errors. However, the taxpayers are still held jointly and severally liable for any amounts that are not granted innocent spouse relief. The following requirements must be met in order for IRS innocent spouse relief to be granted.