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Can abuse victims qualify for innocent spouse relief from having to pay delinquent income taxes?

Whether the the spousal abuse was physical or mental, they are both treated equally under IRS guidelines for determining if abused spouses can qualify for innocent spouse relief. In these situations, women may not have the opportunity to evaluate or understand financial matters, particularly income tax returns. In this event, the IRS will grant relief from having to pay for delinquent taxes which were mainly due to the former spouse’s fraudulent behavior.

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What is innocent spouse relief?

The IRS has the power to release a spouse from direct financial liability for unpaid taxes. This release from responsibility from having to pay tax debts of the other spouse (or estranged spouse) is called innocent spouse relief. The IRS will conduct an evaluation of the spouse’s education, work experience, relationship status (still married, divorced, or separated), physical or mental disabilities, and level of involvement in household finances to determine whether the spouse can qualify for innocent spouse relief.

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When does it make sense to hire a tax attorney to negotiate an IRS Offer in Compromise?

There are some occasions where an attorney is not only useful, but invaluable in assisting you with your IRS offer in compromise negotiation. An attorney can aid in reinforcing your current financial situation to the IRS and typically has more effective lines of communication with IRS agents. The attorney can clarify that all communications go directly through their office and can handle the paperwork and formalities for you, removing much of the stress and work so that you can focus on getting well. If your offer in compromise is rejected, you have the right to appeal to the tax court. As with any court of appeals, this appeal must be handled by an attorney.

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How long does the IRS have to collect back taxes?

The time period (called statute of limitations) within which the IRS can collect a tax debt is generally 10 years from the date the tax was officially assessed. For most cases, the IRS has 3 years from the date the return was filed to audit a tax return and determine if additional tax is due. The time to audit taxes can be extended.

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I knew my husband excluded income from our joint tax return, but he lied to me. Will the IRS still hold me responsible for unpaid taxes?

It is not sufficient to simply say that your husband lied to you regarding intentional omissions from a joint income tax return. Lack of knowledge regarding tax laws is also not a valid argument when trying to obtain relief from a tax deficiency arising from one spouse’s failure to include income or understate tax owed on an income tax return. However, if the spouse seeking relief can prove that she did make an effort to inquire and was repeatedly lied to about the couple’s finances then the IRS can release a spouse from liability for a tax deficiency.

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Settling IRS Tax Debt Through Tax Arbitration or Mediation

You can opt for binding arbitration for either a single factual issue or the entire decision. Appropriate cases for binding arbitration include valuations, reasonable compensation for taxes owed, and allocation of deduction and credit cases. Mediation, just like binding arbitration, must be selected by the tax payer. It must be requested within the parameters of the trial timeline and cannot be used as a means to delay the trial or other settlement procedures. Mediation is also a one-shot deal and cannot be used twice in the same case. IRS mediations are overseen by the tax court and guidance is offered to the mediator where necessary. In order to qualify for either of these methods, you cannot have already appeared in tax court.

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