Introduction
Getting divorced or separated can be emotionally and financially difficult. However, you may be able to get relief from tax debts that arose from a joint tax return you filed with your former spouse. Hiring one of the many qualified innocent spouse relief lawyers can help guide you through the process of applying for relief.
Overview of Innocent Spouse Relief lawyers
The IRS offers three types of relief for innocent spouses:
- Innocent spouse relief: Available when your spouse did not report income, reported income improperly, or claimed improper deductions or credits without your knowledge. You must establish that you did not know or have reason to know of the understatement.
- Separation of liability relief: Available for joint tax returns with unpaid taxes on income earned by your spouse or former spouse. You must be legally separated, divorced, widowed, or have not lived with your spouse for the 12 months prior to filing.
- Equitable relief: Available when it would be unfair to hold you liable for taxes owed and you don’t qualify under the other two types of relief. The IRS considers your marital status, economic hardship, abuse, legal obligations, and more.
Innocent spouse relief can relieve you from owing tax, interest, and penalties on a joint return for items attributable to your spouse. The key is being able to demonstrate you had no knowledge or reason to know of the errors on the return.
When to Hire an Innocent Spouse Relief Lawyer
Navigating innocent spouse relief on your own can be complicated, with lots of IRS forms and tests to meet. An experienced innocent spouse relief lawyer understands the technical details and can increase your chances of qualifying.
Consider hiring a lawyer if:
- You are unsure what relief options you qualify for
- Your claim has been previously denied
- Your case is complex with multiple issues
- You are facing large amounts of unpaid taxes
- You were the victim of domestic abuse or financial control
A lawyer can review your case details, gather evidence on your behalf, complete all IRS forms, and correspond with the IRS to get a favorable outcome. This can relieve you of a stressful process.
Innocent spouse relief lawyers charge on a contingency basis, meaning you pay an agreed upon percentage of your tax savings if they win your case. Initial consultations are often free.
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What to Look for in an Attorney
With tax relief, it’s important to work with a trustworthy and experienced lawyer. Here are some tips for choosing innocent spouse relief lawyers:
Specialization
Seeking out attorneys who focus specifically on IRS tax relief and innocent spouse relief cases can be beneficial. They will have up-to-date knowledge of changing IRS rules, regulations, and qualifying factors.
Experience
It’s best to work with an attorney who has helped numerous clients with their innocent spouse claims. Ask about their success rate in getting relief for past clients. Experienced lawyers often have good working relationships with IRS staff.
Resources
A larger law firm may have more staff, technology resources, and ability to respond quickly. However, a smaller firm may provide more customized attention. Choose based on your preference.
Client Reviews
Online reviews, client testimonials, Avvo ratings, and BBB profiles help identify lawyers with satisfactory client experiences. This helps determine responsive communication and transparency.
Credentials
Verify proper business licenses, education credentials, and certificates indicating expertise in tax law. Membership in professional organizations shows commitment to continuing tax law education.
The Innocent Spouse Relief Process
Here are key phases in the innocent spouse relief process that your lawyer can guide you through:
Initial Consultation
In the initial meeting, the lawyer will evaluate if you may qualify for relief based on your personal tax situation and marital circumstances. They will identify what types of relief to pursue.
Evidence Collection
Your lawyer will strategize what evidence is needed to prove your innocence. This can include testimony, financial records, receipts, letters from friends/family, or a history of domestic abuse.
Completing IRS Forms
Based on your situation, the lawyer will fill out the applicable IRS forms, like Form 8857 for innocent spouse relief requests. Precision and accuracy here are vital.
Corresponding with the IRS
Your lawyer will send the forms to the IRS and serve as your liaison if the IRS requests additional information. Clear communication can expedite processing times.
Appeal If Needed
If your claim gets denied, your lawyer can appeal the decision and provide supplementary evidence on your behalf. In 2019, around 53% of appeal requests were granted full or partial relief.
Example Cases Where Lawyers Secured Innocent Spouse Relief
Here are some examples of past cases where skilled innocent spouse relief lawyers were able to get approval for their clients:
Case 1: Unreported Income
Sara was married to Mark for 8 years when she discovered he had not reported substantial rental income from an investment property on their joint tax returns. She immediately filed for divorce.
Sara hired a lawyer who helped her file Form 8857 and provided evidence she was unaware of the unreported income. This included copies of the tax returns she signed, emails asking Mark about taxes, and testimony from family members about the deception.
The IRS granted her full innocent spouse relief from over $92,000 in taxes, interest, and penalties owed on the unreported income.
Case 2: Fraudulent Business Expenses
Julie owned a bakery with her husband Kevin. After an IRS audit discovered Kevin had wrongly categorized personal vacations as business expenses, the couple owed over $125,000 in back taxes, penalties, and interest.
When Julie filed for separation of liability relief, her claim was initially denied. Her lawyer then filed an appeal with additional evidence of the valid business expenses Julie incurred separately.
Julie was granted separation of liability relief for the fraudulent deductions Kevin claimed without her knowledge. This released her from all owed amounts attributed to him.
Conclusion
Dealing with taxes and marital problems simultaneously is difficult. Innocent spouse relief can be possible but requires accurately proving your innocence. By working with a qualified lawyer, you can feel confident you are taking all necessary steps to gain approval. Focus on finding an attorney experienced with the IRS and settlement cases so you get the best representation possible. With persistence and a skilled lawyer on your side, tax relief is within reach.
Sources:
- https://www.irs.gov/businesses/small-businesses-self-employed/innocent-spouse-relief
- https://www.nolo.com/legal-encyclopedia/what-the-chances-innocent-spouse-relief.html
- https://www.irs.gov/pub/irs-pdf/f8857.pdf
