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Old 01-21-2010, 08:09 PM
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Question about IRS action

My newly married daughter just found out that her husband has a delinquent IRS tax situation. My question is, should they file separate returns and if so, if she is due a refund, could the IRS apply it to her husbands' delinquency?



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Old 01-22-2010, 06:57 AM
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If your daughter files married filing joint, then generally yes, her joint tax refund would be withheld by the IRS to satisfy her spouse's prior tax return delinquencies. The solution is not to file a tax return as married filing separate because most likely your daughter could be subject to a higher tax and so would be getting a lower tax refund!

The IRS has a tax provision to help your taxpayers in a similar situation to that of your daughter. Your daughter should seek Injured Spouse by filing Form 8379. This form is filed by one spouse (the injured spouse) on a jointly filed tax return when the joint overpayment was (or is expected to be) applied (offset) to a past-due obligation of the other spouse. By filing Form 8379, the injured spouse may be able to get back his or her share of the joint refund.

What is the definition of Injured Spouse?
Your daughter may be able to meet the IRS definition of injured if she file's a joint tax return and "all or part of her portion of the overpayment was, or is expected to be, applied (offset) to her spouse’s legally enforceable past-due federal tax, state income tax, child or spousal support, or a federal nontax debt, such as a student loan."

I just want to make it clear that there is another tax provision called "Innocent Spouse Relief". In this provision, your daughter may qualify for relief from the joint tax liability if the tax liability is due to some understatement of tax because daughter's spouse omitted income or claimed false deductions or credits, and she was not aware of it and your daughter is divorced, separated, or no longer living with your spouse. But, this probably would not apply in your daughters case.

Based on the facts and circumstances, I think your daughter would qualify to for the Injured Spouse Relief and should file Form 8379. For further information on this form, please click on the following IRS link below to access this form along with the instructions related to this form.

http://www.irs.gov/pub/irs-pdf/f8379.pdf

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