It is standard practice for spouses to file their taxes together. While some couples do file their annual income tax returns separately, joint filings often help people maximize their use of deductions and credits. Frequently, one spouse handles financial and tax matters while the other may only sign the final return. This approach allows for a more efficient division of marital work. Only one spouse has to review financial records and spend time preparing the annual tax return.
However, such arrangements leave one spouse vulnerable if the other engages in financial misconduct. They may not realize their spouse failed to report certain assets or income. Instead, they assume everything was accurate. Many spouses who do not handle tax filings for their households rely on the other to handle the process appropriately. They may fear the worst when letters from the Internal Revenue Service (IRS) arrive. In scenarios where one spouse may have engaged in tax fraud or tax evasion, the other may have financial liability for that misconduct.
Can a non-filing spouse qualify for innocent spouse relief if their family lives in Georgia?
Innocent spouse relief does not apply in Georgia
The IRS policy for innocent spouse relief has several requirements. The spouse requesting relief needs to be unaware of the issue until they receive notice from the IRS. They also need to live in a community property state. There are only a few states that use the community property standard. Georgia is not one of them. While traditional innocent spouse relief is not available to the non-filing spouse in Georgia, there is another option.
Equitable tax relief can offer a similar form of protection to the spouse who did not actually prepare the tax return. Under equitable tax relief rules, the non-filing spouse can limit or even eliminate their liability for the underpayment of income taxes. Pursuing such relief can be a very complicated process, as they have to prove that forcing them to pay the debt would be unfair. The spouse requesting relief may need support.
Partnering with an attorney can help someone who is afraid of an income tax debt to explore their options for protecting themselves. Equitable tax relief can help a spouse who was unaware of tax issues to more effectively protect themselves from financial devastation.