While working at a client today, one of their customers overheard us talking about the upcoming tax season and asked if I did taxes. After responding that I did the individual asked me a couple questions about how the IRS handles issues when one spouse owes and the other spouse has debt or other obligations that have not been paid. After telling the taxpayer how it was handled I thought to myself that many other taxpayers may be in a similar situation. The situation can usually be handled using the IRS injured spouse or innocent spouse rules.
Injured Spouse – an injured spouse occurs when the IRS attempts to seize the refund on a jointly filed return when only one spouse owes debts or obligations. Relief for the “injured” spouse can be obtained by filing Form 8379.
Innocent Spouse – an innocent spouse occurs when the IRS seizes the refund of a jointly filed return when only one spouse made fraudulent reports on a joint return. Relief for the “innocent “spouse can be obtained by filing Form 8857.
There may be additional steps that may need to be taken, so be sure to speak to your tax advisor before filing in either situation.
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