How To Protect Yourself From A Tax-Cheating Spouse

Couples who elect to file a joint tax return enjoy many advantages. But when you do file jointly, know that both spouses are “jointly and severally liable” for the taxes owed.

This means if one spouse is a tax cheat, leading to a problem with the IRS, both signers of the joint return are equally responsible. That can raise an issue of fairness when one spouse had no knowledge his or her spouse is a tax cheat.

By RAY MARTIN MONEYWATCH September 14, 2017, 5:00 AM Read the entire article HERE on MoneyWatch website

For this reason, under Section 6015, current or former spouses have three ways to obtain relief from taxes due, interest and penalties that result when their tax-cheating spouse improperly reports income, deductions or tax credits on their jointly filed tax return.

One of the most important procedural steps that must be followed under all three methods is that the spouse requesting relief must file Form 8857 – Request for Innocent Spouse Relief no later than two years after the date on which the IRS first attempted to collect the tax in question. Failure to perform this step in a timely manner can result in the IRS denying your request.

Under the first method, four requirements must be satisfied to gain relief: