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IRS Gives ‘Innocent Spouses’ More Time to File

August 11th

It’s the nightmare scenario: you’re at home, the phone rings, and it’s the IRS calling to tell you that you have unpaid taxes because your spouse or ex-spouse neglected to pay.

Well this week the IRS has changed its policies regarding taxes and so-called “innocent spouses.” Most importantly, they have lengthened the amount of time non-offending spouses have to file for tax help.

Internal Revenue Service Commissioner Doug Shulman commented to DailyFinance that he believes this is a “dramatic step” in helping to improve the situation of the innocent spouse “victimized in the past, present and the future.”

Why is this an Issue?

innocent spouseThe problem is when an individual signs IRS forms with their spouse, they become jointly and severely liable. This means that if the IRS follows up on unpaid taxes, both spouses are equally accountable for the amount. Thusly, if the spouse is unavailable, or unable to pay, the “innocent spouse” becomes responsible for the entire amount, unless innocence can be proven as defined by the Internal Revenue Service.

Previously, “innocent spouses” only had two years to start the process of attempting to prove innocence. This can be an issue because an “innocent spouse” may not know he or she is liable or in need of starting proceedings until it is too late.

How Can the New Regulations Help?

Under these revised policies it makes it harder to hold an individual accountable for their ex-spouse’s back taxes. The new policies also protect those who might have been coerced into signing tax forms, such as abused women.

The two-year limit has also been abolished, thereby giving “innocent spouses” more time in which to prove their lack of involvement. Similarly, the two-year limit will be waived in cases already in progress, and those that were denied because of the limit will be reconsidered.

In addition, there have been revisions to consideration of what qualifies a spouse as “innocent.” The IRS now look at a number of factors including whether the couple is still married, if the individual will endure economic hardship if made to pay, knowledge of the tax evasion, and poor health.


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