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Old 09-13-2011, 07:15 PM
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Back Taxes

I was married to a man who owned his own business. We filed taxes, but he never made any payments. Due to that we owe the IRS a lot of money. We are now divorced. I'm not sure what to do with the back taxes that I owe. There is no way that I can afford to pay them. Is there anything I can do?



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Old 09-14-2011, 02:13 AM
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“We filed taxes, but he never made any payments. Due to that we owe the IRS a lot of money. We are now divorced. I'm not sure what to do with the back taxes that I owe. There is no way that I can afford to pay them. Is there anything I can do?”--->I guess possibly ;however, it depends on the situation. As you know, as long as you sign a joint return, the IRS may be able to collect any delinquent tax relating to that return from you even if your spouse was the one who reported incorrectly.However, UNDER Separate Liability Election, the underpayment of tax can be separated between you and your spouse. This means that that different amounts can be allocated to each spouse instead of both of them being held equally liable for the entire amount of tax owed. So, to be eligible for SLE, you haven't been a member of the same household with your spouse at any time in the 12-month period ending on the date you filed the election; you're divorced or legally separated from the person with whom you filed the joint return.You may escape liability in circumstances where you wouldn't otherwise qualify. In general, If you meet the requirements described above, then you can elect to limit your liability to your share of the tax liability. In the typical case, the spouse who failed to report properly will end up with the liability. But you can still be stuck if you signed a return you knew was wrong.I mean relief doesn't apply to any item your spouse reported incorrectly if you had actual knowledge that it was incorrect at the time you signed the return .However, The IRS has the burden of demonstrating that you had actual knowledge. If you don't meet this requirement you can still attempt to qualify under the Innocent Spouse Rule or request Equitable Relief. The IRS won't automatically grant you relief under this provision, so you need to file IRS Form 8857 with the IRS. You must apply for relief within two years after the date the IRS begins collection activities against you. You can apply for this relief even if you qualify for, and apply for, relief under the Innocent Spouse Rule. If the IRS says you don't qualify for relief, you can petition the Tax Court to determine whether the IRS is correct.
Under innocent spouse rule( I guess you may be subject to this rule), You're eligible for relief if you filed a joint return as said above on which there was an understatement of tax due to an erroneous item relating to your spouse; You didn't know, and had no reason to know, about the understatement when you signed the return. Looking at all the facts and circumstances, it would be unfair to make you pay the tax. You apply for relief under this provision within two years after the IRS begins trying to collect the tax from you. So, if you meet all these requirements, then you don't have to pay the portion of tax that relates to this erroneous item. UNLIKE SLE, of course, this is NOT your case( as you are now divorced),Innocent spouse relief may be available even if you're still married to, and living with, the spouse who should have reported additional tax. If you have assets of your own and want to protect them from collection by the IRS, these rules determine whether you can be held liable. Innocent spouse relief applies only to tax liability that arises from an "erroneous item." That means you can't use this provision for relief if you sign a correct return and your spouse simply fails to pay the amount shown on the tax return. If your return was correct and your spouse didn't pay. As long as you qualify for relief under this rule, you're relieved of liability for tax, interest and penalties relating to the understatement. REMEBER: as said above,you don’t get relief if you knew the return was incorrect or even if the court thinks you should have known. Some court decisions indicate that you can't satisfy this condition unless you actually examine the return and ask questions about anything that doesn't seem right an unrealistic expectation in many marriages. Under the new rule, if you only knew (or had reason to know) about part of the understatement of tax, you're only stuck for that part. If you had reason to believe your spouse was cheating to the extent of a few hundred dollars and it turned out to be many thousands, you should only have to pay the smaller amount.So, if you think thsat you met the requirements, then you need to file Form 8857.I guess you may get some profesional help from a tax attorney.
Please visit the IRS Website here: Innocent Spouse Questions & Answers



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