Innocent Spouse Relief vs Injured Spouse
IRS Form 8379
Receiving a notice indicating that you owe additional tax on a joint return can be a bit scary. Fortunately, when the IRS mails out this notice, commonly known as the Notice of Offset, it includes clear instructions and enough information to help you understand whether you need to apply for injured spouse or innocent spouse relief.
Understanding the distinction between injured spouse and innocent spouse is crucial if your tax refund was reduced, or if you find yourself owing money on taxes due to an audit.
Why Is It Important To Understand the Difference Between Injured Spouse vs Innocent Spouse?
Being married and having the opportunity to file taxes jointly to leverage the advantages of tax brackets is indeed a privilege. However, this privilege of filing jointly does come with a significant downside if not careful. Any debt, especially tax debt, becomes the responsibility of both spouses, even if the debt incurred prior to marriage.
Understanding the distinction between injured spouse and innocent spouse will guide you in finding a solution if you have recently received a Notice of Offset from the IRS. This situation arises due to a reduction in your tax refund amount or an outstanding balance owed to the IRS, due to an audit.
What is Injured Spouse vs Innocent Spouse?
Injured spouse relief is designed to help you recover your portion of a federal tax refund that was allocated to your spouse’s taxes or any tax debt. On the other hand, innocent spouse relief will exempt you from paying additional taxes if your spouse made errors on the joint tax return and you were not involved or aware of these errors.
Who Qualifies as an Injured Spouse?
To qualify for injured spouse relief, the spouse who was unaware of any errors in the joint filing or was unaware of any debts incurred by the other spouse, may potentially qualify for this relief. Meeting all criterias is essential, and the necessary form to file is Form 8379, referred to as Injured Spouse Allocation. By submitting Form 8379, you are informing the IRS about which spouse is entitled to a refund and which spouse has an outstanding debt.
Injured Spouse Eligibility Criteria
To be eligible for the injured spouse relief, you essentially must have had no involvement receiving a formal Notice of Offset from the IRS. When this notice is received, ensure to read it thoroughly, as it contains vital information, including a defined timeline to respond back to the IRS.
How to File an Injured Spouse Claim
Filing an injured spouse claim can be somewhat intimidating. It’s important to know that the form you’ll be submitting is Form 8379. Essentially, this form communicates to the IRS to pay close attention to distinguish between the spouse entitled a refund and the spouse with the outstanding tax debt.
Who Qualifies For The Innocent Spouse Relief?
On the other hand, the innocent spouse relief is designed for the spouse who signed a complete tax return but was not aware of their spouse’s current tax debt. From the IRS’s perspective, you might be entitled to the innocent spouse program, as it would be unfair to hold you responsible for the understated taxes.
How to Apply to an Innocent Spouse Relief
To apply for the innocent spouse relief, you will need to submit Form 8857. Filling out the form can be somewhat overwhelming, especially if you’re not entirely sure of the necessary details. If you require further help and assistance, we can help.
I’m I Really Liable for My Spouse’s Tax Debt?
Yes, you are liable for your spouse’s tax debt. As a married couple, filing jointly is a privilege due to the benefits of the tax breaks and other advantages. When deciding to file jointly, both spouses become liable, even if spouse A is unaware of the current tax debt from spouse B. Fortunately, there are potential solutions, so if you find yourself in this situation, you can apply for either injured spouse or innocent spouse relief.
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