Tag Archives: Tax Services

Applying for Innocent Spouse Relief-Know Your Options

If your ex-spouse understated their taxes, you may qualify for innocent spouse relief. Under the IRS definition, an innocent spouse has never intentionally understated their tax liability. In other words, he or she didn’t know that their ex-spouse owed money. Once you file Form 8857, the IRS will calculate your tax debt. In most cases, you’ll be entitled to all of the understated tax, including interest and penalties. In most cases, you’ll have to prove that you were unaware of your spouse’s understatement of tax.

Fortunately, there are several options for innocent spouse relief. First, if your spouse filed a joint return with an understated amount of tax, you may be able to qualify. As long as you didn’t know about the error and didn’t have any reason to know about it, you may be eligible for innocent spouse relief. In some cases, you can even apply for innocent spouse relief if your spouse engaged in fraudulent transfer of property.

In the past, the IRS has been very strict with the types of relief available to innocent spouses. Generally, innocent spouse relief is only available for unreported income and that you must meet strict requirements. In the new IRS code, taxpayers won’t have to specify which type of relief they qualify for. If they do qualify for another type of relief, they’ll need to file separately. So, how can you apply for innocent spouse relief?

In most cases, innocent spouse relief will not be granted if the IRS can prove that the tax burden was understated. This is because it would be unfair to hold the innocent spouse liable for an understated tax if they didn’t know about it. This relief is generally not granted on the basis of the application alone, and many applications are rejected without even a chance of being approved. When applying for innocent spouse relief, you’ll need to know that the IRS receives more than 50,000 applications per year. Just about half of these applications will be granted, so the chances of obtaining it are slim.

Generally, you can apply for innocent spouse relief if your spouse didn’t make any mistakes on their tax returns. It’s important to note that the IRS does not have the resources to review every joint collection account to determine who’s the innocent spouse. Therefore, you should hire a tax lawyer to help you. The IRS must notify your spouse of your intent to file for innocent spouse relief and allow your spouse to participate in the process.

Innocent spouse relief must be requested within two years of the IRS’ first attempt to collect tax. However, if you have been unable to manage your financial affairs during that time, your application may be considered timely if you meet other criteria. You’ll need to show that you paid the tax with your own money – a bank statement or a canceled check will do. If you paid with individual refunds, the IRS does not require you to provide proof of your involvement in the erroneous item.

The deciding factor in determining whether you qualify for innocent spouse relief is the type of liability you incurred in your marriage. The determining factor is whether your spouse filed joint returns or not. If he or she did, the other spouse filed a joint return for the same tax year. If your spouse filed a joint return, that return contained a substantial understatement of tax that was due to grossly erroneous items on the other spouse’s return. In such cases, the innocent spouse is not liable.

Innocent spouse relief can be obtained in many ways. The most common way to raise the issue is by filing a Form 8857. Form 8857 is designed to gather information about the case and the factors that may help your spouse obtain relief. In part VI, the requesting spouse can tell their story. A good narrative will weave in all the facts that may make it possible to qualify for innocent spouse relief. So, if your spouse is unsure about the status of his or her marriage, don’t worry.

If you are not eligible for innocent spouse relief, you can still receive equitable relief. But you must meet other requirements for this relief, including establishing unfairness and meeting other requirements outlined in Publication 971. You may also qualify for equitable relief if your ex-spouse abused you, manipulated your finances, or used unfair means to get the money. Regardless, you can appeal the decision to the IRS. The IRS may change its mind or grant innocent spouse relief.

Unsettled Tax Debt – What are Your Options

There are a number of options for taxpayers who are facing unsettled tax debts. These options include bankruptcy, failed comeback case submissions, and seeking the assistance of an IRS lawyer. IRS lawyers specialize in dealing with tax issues and will work with the IRS to help taxpayers minimize their tax debts and avoid bankruptcy. Tax attorneys understand how the IRS process works and will know how to best protect taxpayers’ rights.

While many taxpayers may have difficulty with IRS collection efforts, there is hope. The IRS and state revenue departments can be relentless in collecting tax debts. Not only can the taxpayers face higher penalties and fees, but they could have their credit opportunities and possessions seized. This is where the services of an IRS tax lawyer can help. By hiring a qualified attorney, you will receive the help you need to fight the IRS.

An offer in compromise (OIC) is another option for taxpayers with unsettled tax debts. An OIC allows a taxpayer to settle their debt for a smaller amount than it was originally due. It is often the best option for people with low incomes and limited resources, since this approach is more likely to be accepted by the IRS. An Offer in Compromise can be difficult to get approved, so only those with low incomes or businesses may be eligible for it.

Taxpayers should never ignore an unsettled tax debt because it may be difficult to pay. It is important to remember that the IRS’s primary goal is to collect taxes, but they also have a duty to act fairly and encourage voluntary compliance. By allowing some taxpayers to negotiate their tax debts, the IRS can avoid filing a levy on their property, which will make it more difficult to refinance a home.

The IRS offers repayment plans for unsettled tax debts, which can be as little as $0 or as much as $225. Most taxpayers who qualify for these plans can get their debts reduced through an offer in compromise, if they can show that they can pay a small amount each month and cover other expenses. These plans may also be a good option if you have good income and don’t mind paying a small monthly fee to the IRS.

Taxpayers who ignore their unpaid debts may be faced with a number of penalties and increased costs of taxes. Late fees start at 0.5% of the tax debt. Interest accrues at the federal short-term rate plus three percent. If this continues, the government may file liens on your property, garnish your wages, or seize your assets. This can severely hurt your finances. If ignored, tax debts can destroy your credit.

A business owner can also take steps to protect themselves by examining the background of a potential business partner. Performing a background check on a potential business partner can expose the person’s past tax problems, including any debts with the IRS. If a business partner doesn’t have the experience or success in the field, it can become a target of unsettled tax debts. In such cases, it is crucial to protect assets that have been invested in a business.

Once an unsettled tax debt has accumulated enough interest and penalties to make it impossible to pay, the IRS will seek to collect the debt. Moreover, if you do not make payments, the IRS may levy a portion of your paycheck or apply a tax refund towards the debt. Although the IRS prefers to work with taxpayers to reach an amicable agreement, it does have its share of penalties. The vast majority of penalties for nonpayment are monetary in nature. Criminal penalties are reserved for tax fraud.

While the IRS has the right to levy the assets of unpaid tax debtors, this rarely happens. The government will issue several notices before taking an asset. It may also levy a life insurance policy. Whether an asset is worth $700k or $1.8 million, the IRS can seize it if the debtor doesn’t pay it within a certain amount of time. Despite the legal threats, this situation is relatively easy to avoid.