Is it getting harder for a spouse to be innocent?

Article Abstract:

Innocent spouse protection is granted to spouses filing joint returns that can establish that they were ignorant of a substantial understatement of tax that can be traced to erroneous items or the taxpayer at fault. The taxpayer, to establish themselves as an innocent spouse and avoid penalties, must show that they had no reason to know of the substantial understatement. The Tax Court has ruled that the fact that a taxpayer signed a return blindly, without making an attempt to understand the return, is not a permissible defense that establishes innocent spouse protection. To be an innocent spouse, the spouse must meet a prudent taxpayer test, proving that they questioned the accounts in the return in question before signing it. Taxpayers must review the income tax return, question items, and not sign the return blindly.

Taxation, Husband and wife, Husband-wife relations, Innocent spouse (Taxation)

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Protection from liability available under innocent spouse rule when a joint return was intended

Article Abstract:

The only way to avoid joint and several liability when a joint tax return is intended is to take advantage of the 'innocent spouse' rule. The taxpayer may then escape tax liability resulting from another's actions, so long as several conditions are met. The following prerequisites must be met: a married-filing-jointly return was submitted for the deficiency year; the tax return showed a significant understatement of taxes due; the taxpayer who signed the return was unaware of the substantial understatement; and it would be unfair to hold the taxpayer responsible for the deficiency. The base of those eligible under the innocent spouse rule was broadened under provisions of the Deficit Reduction Act of 1984, but the procedure is still somewhat complicated and is strictly interpreted.

Laws, regulations and rules, Tax returns

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Innocent spouse rules can avoid unexpected liability on joint returns with former spouse

Article Abstract:

Comprehensive divorce decrees or separation agreements allocate between spouses any tax liability resulting from prior joint returns, but do not prevent the IRS from pursuing both spouses for unpaid taxes on a joint return. Innocent spouse rules may be used to avoid such liability, and steps that divorce practitioners can take during divorce negotiations if there are warning signs of problems with prior filed joint returns are discussed. Suggestions for dealing with the IRS when an innocent spouse claim is warranted, and for filing a petition with the Tax Court when an innocent spouse claim is unsuccessful with the IRS are presented.

Interpretation and construction, Tax law

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