When married couples file joint tax returns, they accept individual and joint responsibility for any taxes owed. That means the IRS can ask either spouse or both to pay the taxes, along with any penalties and interest. This is true even if they later divorce, and even if one party was the primary or sole earner for the couple.
But what happens when one spouse is owed a refund but the other owes taxes? Or what if one spouse’s refund is seized to pay the other spouse’s child or spousal support liabilities? There are some tax liabilities that only one spouse, or only an ex-spouse, should be responsible for.
In such cases, there may be relief available through the IRS.
Innocent/injured spouse relief and equitable relief
Generally, an “innocent spouse” is one with unjust tax liabilities caused by a spouse or former spouse. You are typically considered an “injured spouse” if your share of an overpayment in taxes was (or will be) applied against your spouse or ex’s debts, such as:
- Past-due federal debts
- State taxes
- Child support arrears
- Spousal support arrears
The IRS offers some relief in both situations, and this could include a refund for your share of any tax overpayment.
“Equitable relief” refers to the IRS’s ability to look at the entirety of the situation and determine a just result.
It will weigh factors such as whether the spouse requesting relief knew about the tax liabilities or other debts before he or she signed the tax return, whether there was domestic violence or financial abuse, the requesting spouse’s physical or mental condition and other factors.
If you think you might be considered an innocent or injured spouse, you can request relief through the IRS. However, there are deadlines to be considered. For example, you must apply for innocent spouse relief within two years of the first IRS collection activity on the taxes owed.
Making a case for injured or innocent spouse relief can be complex, and you should consider asking a tax attorney for assistance.