INNOCENT
SPOUSE
‘Innocent
spouses’ get tax relief
Divorced
or legally separated people facing IRS difficulties because
their spouses failed to pay taxes should have an easier
time getting relief under guidelines recently announced.
The
rules, which arose from the IRS reform law Congress passed
last summer, are aimed at preventing people from suffering
if their former partner made a mistake, cheated on taxes,
or simply refused to pay Uncle Sam.
"This
is an important step that provides new avenues of relief
in extraordinary situations to married or formerly married
taxpayers," said Deputy Treasury Secretary Lawrence
Summers.
Development
of the interim rules will permit the Internal Revenue
Service to decide a backlog of 2,000 requests for "innocent
spouse" relief that were pending before the reform
law passed Congress in July. The rules will be used in
all other such cases until final guidelines are adopted
next year.
Under
the tax code, married people filing joint income tax returns
are each liable for taxes owed and assessments arising
from an audit, interest, and penalties. Existing law provided
for some relief for innocent spouses, but qualifying was
fairly strict.
The new law provides outright relief for
spouses who can establish that they didn’t know taxes
were not being paid and for situations in which an additional
tax is clearly the other spouse’s responsibility.
The
IRS has also issued guidelines for a new "equitable
relief" category for people who don’t qualify for
the other types of relief, but could still suffer -- even
if they knew their spouse wasn’t paying taxes.
The
IRS will weigh other factors in deciding such a relief
request, including a showing that paying the tax would
cause "undue hardship" financially, that the
taxpayer suffered abuse at a spouse’s hands, or that the
non-paying spouse had a legal obligation -- such as a
divorce decree -- to eventually pay the tax.
Find
out right now, without cost to you, whether or not you
qualify for innocent spouse or equitable relief. Call
for a Free Consultation!
"The
taxpayers affected have been among the nation’s most vulnerable
and will benefit significantly from the enhanced relief,"
IRS Commissioner Charles Rossotti said.
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