Innocent Spouse Relief
If you have been contacted by the Internal Revenue Service (IRS) or South Carolina Department of Revenue (SCDOR) regarding unpaid taxes, penalties and/or interest for a joint tax return you filed with a current or former spouse and you feel that you should not be responsible for the taxes owed, you may be able to secure Innocent Spouse Relief, which relieves you of liability for those taxes.
Often, married taxpayers file a joint tax return in order to take advantage of certain tax benefits afforded by this filing status. Both taxpayers incur individual and joint responsibility for the entire amount of taxes owed even if they later divorce. Therefore, both spouses are generally held responsible for the entire amount due even if only one spouse made the majority of the taxable income.
However, there are three types of relief from joint responsibility for spouses who filed joint returns:
- Innocent Spouse Relief provides relief from additional taxes owed as a result of an audit if an individual’s spouse or former spouse failed to report income, reported income improperly or claimed improper deductions or credits.
- Separation of Liability Relief provides for the allocation of additional tax owed as of a result of an audit between the individual and his or her spouse or former spouse because an item was not property reported on a joint return. The individual is allocated the amount of tax for which he or she alone is responsible.
- Equitable Relief is an option if the individual does not qualify for Innocent Spouse Relief or Separation of Liability Relief and the IRS determines that it is unfair to hold the individual liable for the tax liability taking into account all the facts and circumstances
Relief is available for a limited amount of time (2 years) starting from the date you first began receiving notices from the taxing authorities. Upon filing for Innocent Spouse Relief, it may take up to 6 months before a determination is made. Upon receipt of the individual’s request for relief, all collection activity against him or her is suspended unless the liability is in jeopardy or the statute of limitation on will expire soon thereafter.
Additionally, you may be due a refund if your past refunds or stimulus checks were applied to a different tax period. There are also time limitations on refunds, so avoid procrastination or your rights may be impaired.