Understanding Innocent Spouse Defense
In order to qualify for innocent spouse defense, you must have filed a joint tax return with your spouse. The return must contain an erroneous item and you must be able to show the IRS that, when you signed the return, you had no knowledge or reason to know about the mistake. According to the IRS, an erroneous item may be any form of unreported income, an incorrect deduction or incorrect credit.
Actual knowledge refers to whether or not you were award of the mistake. If you signed the return knowing that it was in error, you will not qualify for innocent spouse relief. If a hypothetical, reasonable person in the same situation wouldn’t have known about the mistake, then you may still qualify. However, if you claim that you didn’t’ know about the mistake but a reasonable individual in your situation probably would have, the IRS may not accept your petition for innocent spouse relief.
Other factors that the IRS may take into consideration include:
- The type of erroneous information on your tax return
- Your financial situation and your spouse’s financial situation
- Your education background
- Whether or not you have any business experience
- Whether or not you asked your spouse if there was a mistake on the return
Once the IRS takes all of these factors into consideration, it will determine whether or not you qualify for innocent spouse relief.