When you file a joint tax return with your spouse, you get to benefit from many advantages extended to married couples. However, it is important to know that the IRS will hold you and your spouse jointly and severally responsible for any tax, interest, and penalties that may apply. This means that the IRS can demand that either one of you settle a tax liability, even if you happen to separate or divorce in the future.
Have you recently been notified by the IRS that (a) your refund has been diverted to satisfy a federal debt or (b) you owe tax, penalties, and interest because of improperly reported income? Contact Maryland tax attorney Juda Gabaie to find out if you may qualify for innocent or injured spouse status.
What's the Difference Between an Innocent and Injured Spouse?
Do you qualify as an injured spouse or an innocent spouse? The answer to this question likely depends on your current marital status and the type of tax issue you're fighting.
Innocent Spouse Status
You may be able to claim innocent spouse status if you filed a joint return with your spouse that erroneously reported your income. However, this mistake must be entirely your spouse's fault, and you can't have known about the inaccuracy at the time of filing.
In order to qualify as an innocent spouse, you must be able to satisfy all of the following requirements:
- You filed a joint tax return that contained an error that is “solely attributable” to your spouse. This error can be in relation to reported income, deductions and/or credits claimed, and/or improperly reported basis of property.
- You must assert that you were not (and could not have been) aware of the error at the time the tax return was filed.
- You must prove that it would be unfair to hold you responsible for your spouse's error and resulting tax, penalties, and interest.
While innocent spouse status is available when you're still married, it most often applies when you and your spouse have separated or divorced.
Injured Spouse Status
Did you file your taxes and expected to receive a refund? Was that refund withheld by the government to satisfy debt attributable to your spouse? If so, you may be able to qualify for injured spouse status and receive a portion of the refund.
In order to qualify as an injured spouse, you must be able to satisfy all of the following requirements:
- You must have paid income tax and/or claimed a refundable credit.
- You must not be legally obligated to pay your spouse's debt (e.g., federal student loan debt, unpaid child support or alimony).
Determining whether or not you are on the hook for your spouse's debt can be tricky. Maryland is not a community property state, which means that your spouse's debts are not necessarily also your debts. However, contractual language and obligations can vary, so it is important to check the fine print concerning your spouse's unpaid-debts. If you're also legally responsible for the debt, you can't claim injured spouse status.
Get Help Requesting Injured or Innocent Spouse Status
If you think that you may qualify for injured or innocent spouse status, it's important to speak with an experienced Maryland tax attorney as soon as you can. You only have a limited amount of time to request injured or innocent spouse status
If you don't file a request to be treated as an injured or innocent spouse, you will miss your opportunity to protect yourself from your spouse's liability. Contact Gabaie & Associates, LLC today to schedule a free case evaluation with our skilled legal team.