Ex-wives can seek relief from IRS back taxes by applying for Innocent Spouse Relief, which is a program offered by the IRS. 26 U.S.C. § 6015(a)(1). Innocent Spouse Relief relieves an ex-wife of responsibility for paying any “additions to tax, interest, and penalties” when an ex-husband under-reported income or took unauthorized business deductions on an IRS Form 1040 joint tax return. Note that a Substitute for Return (SFR) filed by the IRS per 26 U.S.C. § 6020(b) might not qualify. See IRM § 220.127.116.11 (12-12-2016).
There are many conditions that must be met before the IRS will grant relief. The most important condition relates to the existence of a joint tax return. An ex-wife seeking Innocent Spouse Relief must have filed a joint tax return for the tax year in question. Innocent Spouse Relief is not available for an ex-wife who filed an individual IRS Form 1040 for the tax year relating to the under-reporting of income or unauthorized business deductions.
Thankfully, the joint-tax-return condition is easily proved by obtaining a tax transcript from the IRS. Your tax attorney can obtain the tax transcript fairly effortlessly with your authorization. Notations/codes on the IRS tax transcript would prove that the joint return was filed.
Innocent Spouse Relief from Ex-husband’s Tax Problems
Attorney Robert Schaller is frequently asked: “Is an ex-wife liable for a self-employed ex-husband’s hiding income or taking improper business deductions on a joint return filed before the divorce?” Yes, sadly, if a joint tax return was filed for the tax year in question.
When filing jointly, a wife is jointly and severally liable for the tax and any additions to tax, interest, and penalties that arise from the joint return even if they later divorce. 26 U.S.C. § 6013(d)(3); 26 C.F.R. § 1.6015-1(a); Haag v. Comm. of Internal Revenue, 683 F.3d 26, 29 (1st Cir. 2012); Rubel v. Comm. of Internal Revenue, 856 F.3d 301, 303 (3rd Cir. 2017); Pullins v. Comm. of Internal Revenue, 136 T.C. 432, 437 (2011). Joint and several liability means that a wife is legally responsible for the entire liability shown or that should have been shown on their joint return. Manella v. Comm. of Internal Revenue, 631 F.3d 115, 117 (3rd Cir. 2011). Thus, a wife who files a joint return is generally held responsible for all the tax due even if the husband earned all the income or claimed improper deductions or credits. This is true even if a subsequent divorce decree states that the ex-husband will be responsible for any amounts due on previously filed joint returns.
Attorney Robert Schaller provides legal services to clients who are struggling with IRS back taxes. He offers services that include Offer in Compromise, Installment Agreements, and Innocent Spouse tax relief. Robert strives to offer clients a fresh start in life debt-free of IRS taxes. Zoom conferencing available. Call for a free consultation: 630-655-1233.