Injured Spouse Allocation

Dealing with tax debt is stressful, but imagine the IRS taking your refund due to your spouse’s past debts. This is the frustrating reality for an injured spouse. This article offers a guide to understanding injured spouse relief. We’ll cover eligibility, claiming relief, and what to do if the IRS has already offset your refund.

Table of Contents:

• Understanding Injured Spouse Status
  • Who Qualifies as an Injured Spouse?
• Claiming Injured Spouse Relief: A Step-by-Step Guide
  • 1. File Form 8379
  • 2. What Happens Next?
• What If the IRS Has Already Taken My Refund?
• Injured Spouse vs. Innocent Spouse

Understanding Injured Spouse Status

The term “injured spouse” applies when the IRS uses part or all of your refund to settle your spouse’s federal tax liability on a joint tax return. These debts can include unpaid taxes, student loans, and past-due child support. This can happen even if you’re entitled to a refund based on your income and withholdings.

Who Qualifies as an Injured Spouse?

You might qualify for injured spouse relief if you meet these conditions:

• You filed a joint income tax return.
• Your portion of the federal tax refund was used to pay your spouse’s debt.
• You aren’t liable for that debt.

Living in a community property state may impact your eligibility. Community property laws can make you responsible for debts, even if they originated before your marriage. For more information on community property, refer to Publication 555.

Claiming Injured Spouse Relief: A Step-by-Step Guide

Dealing with the IRS can be overwhelming. Figuring out where to begin with the tax forms can be daunting. But claiming injured spouse status is straightforward if you’re organized. Here’s what to do if your tax refund has been seized, or you expect it will be.

1. File Form 8379

Form 8379, Injured Spouse Allocation, is the core of your claim. This form officially requests your share of the refund. Complete it and attach it to your joint tax return, along with W-2s and 1099s for both of you. It’s advisable to do this immediately when filing the applicable tax year return.

For additional information, review Form 8379.

Find instructions for filling out Form 8379.

2. What Happens Next?

The IRS reviews Form 8379. It separates the joint return between each filer, allocating income, tax payments, and credits. The IRS calculates the separated refund amounts.

It then disburses your portion. File Form 8379 within three years of filing the return, or within two years of paying the tax, whichever date is later.

If you didn’t file an income tax return, file within two years of the tax payment date.

Internal Revenue Code Section 6511 details when these periods might be extended.

What If the IRS Has Already Taken My Refund?

If the IRS has offset your refund, don’t panic. File Form 8379 separately. Mail it to the IRS center where you filed your original return. Include the tax year in question on Form 8379. Be sure to sign it.

You should receive a Notice of Offset from the IRS or the Bureau of the Fiscal Service (BFS). This notice specifies the original refund and offset amount. It includes the receiving agency’s contact information.

If you have questions, contact Global Gate Taxes for assistance.

Injured Spouse vs. Innocent Spouse

People often confuse injured spouse and innocent spouse statuses. Both statuses deal with different situations.

An injured spouse has part of their refund used to pay their spouse’s separate debt. Injured spouse allocation helps ensure that the injured spouse receives their portion of the refund. This doesn’t absolve the other spouse’s debt. They remain responsible.

Innocent spouse relief applies when a joint tax return has errors due to fraudulent actions. These could be incorrect entries or an omitted income source.

Innocent spouse relief protects joint filers from financial penalties under specific circumstances.

If you believe tax fraud occurred, consult with a tax attorney. They can help determine which status applies to your case.

An IRS offset as an injured spouse is stressful, but you can find relief. File Form 8379 within the required time frame. This is crucial for claiming injured spouse relief and receiving your proper refund. Understanding the process and taking action makes navigating this challenge easier.