Applying to be an Innocent Spouse can feel daunting, but the IRS wants to ensure taxpayers are treated fairly during its review.
That's why they evaluate each situation from several angles—whether one spouse knew about unreported income not reported on a joint tax return, whether or not their marital status changed since filing that particular return, and more.
So take a breath: understanding what goes into this process is your first step towards resolution!
Actual Knowledge or Reason to Know
When considering an innocent spouse claim, the IRS will consider many factors, such as the amount and type of erroneous entry, the taxpayer’s financial situation, education level, and relevant professional experience.
And – how involved you were in creating this error, whether questions about certain omissions/entries were asked before signing off on your return, or if there has been any departure from prior recurring patterns found within past returns.
Indications of Unfairness
In certain life circumstances, such as divorce or desertion by a spouse, the responsibility to cover taxes may fall unfairly on one party. The IRS will explore these extraordinary situations.
On the other hand, if you received significant benefits like cash or property from the spouse that goes beyond normal support, the IRS may hold you responsible for the associated tax liability.
According to IRS regulations, transferring an abundance of assets to minimize individual tax burden is considered a fraudulent act.