You may be one of the many spouses who trust their partner to take care of the finances but there is a potential sting in the tail with regards to that sort of financial arrangement.
Through no fault of your own, you could discover that the tax authorities decide to pursue you for any shortfall or tax mistake that they are demanding is settled even if you knew nothing about it beforehand.
In these and other similar circumstances, it is always comforting to have access to tax attorneys who’ll help protect your financial future and represent your interests when you are an innocent bystander caught in the crossfire of an unexpected tax demand or investigation.
The issue of joint and several liability
A sizeable percentage of married taxpayers tend to choose the option of filing a joint tax return, mainly because there are tax benefits to be gained from taking this approach.
However, taking this approach does represent a risk in that you will be viewed by the tax authorities as jointly liable for any tax owed, which means that you could be pursued for tax owed by your partner.
The bottom line is that joint and several liability means that either partner could be held responsible for all of the tax due even if it was your partner that filed an incorrect claim or under-declared their income.
Even if you have divorced your partner, you could be held liable for the period when you were together if that is when the tax due was incurred.
Relief available
There are certain circumstances where it is possible that you can legitimately claim relief from being considered jointly and severally liable.
The IRS, for instance, offers three specific types of relief in relation to joint liability when you have filed a return with your partner.
You may be able to claim what is known as Innocent Spouse Relief which is designed to offer relief from being pursued for additional taxes if your present or former spouse failed to report their income accurately or did not claim the correct deductions they were entitled to.
Another option would be to try and claim Separation of Liability Relief, which is aimed at trying to fairly apportion the amount of tax you are fairly liable for, with the remaining tax burden falling on your partner.
It is worth pointing out that you can’t claim refunds under the terms of Separation of Liability Relief.
Finally, there is also Equitable Relief as an option, which applies when your circumstances mean you don’t qualify for innocent spouse relief. A typical circumstance here would be when the tax reported was correct but wasn’t paid when the return was filed.
Don’t leave it too late
As you can see, there are opportunities to escape the clutches of the tax authorities when you are an innocent bystander and your partner is the one at fault, but you need to act swiftly as you only have a maximum of 2 years to claim relief from when you are first contacted to collect the tax due.
Seek professional help in these circumstances so that you get the fair treatment you deserve when you are being asked to pay for your partner’s mistakes or misdemeanors.
