Category: Innocent Spouse Relief

Innocent spouse relief can allow a taxpayer to avoid joint liability for taxes that arose during the marriage. There is an exception for the would-be innocent spouse if they had actual knowledge of the item that resulted in the tax. The U.S. Tax Court addressed this limitation in McDonald v. Commissioner, T.C. Summary Opinion 2016-79,…

Innocent spouse tax relief can provide a remedy for spouses who are liable for taxes reported on a jointly filed income tax return.  It is an equitable remedy.  But is it available if the tax is due to an obvious error on the tax returns that the spouses both signed?  The court addressed this in Denton…

Married couples who file joint tax returns are both liable for any deficiencies or underpayments. But if one spouse qualifies as an “innocent spouse,” they can be relieved of the tax burden. An important question arises – if an innocent spouse previously paid the joint tax debt, are they entitled to a full refund? A…

Alimony can be a complicated and contentious issue in divorce proceedings, particularly when it comes to taxes. If payments qualify as alimony pursuant to federal tax law, the payments may be tax deductible by the payor spouse and included in gross income to the payee spouse. Conversely, if the amounts are not alimony for federal…

Divorce is a stressful situation. It is one where people do not always act as they should. This includes taking actions that caused or led up to the divorce. Right or wrong, the shared finances of marriage often come into play. This results in additional marital disputes. Innocent spouse relief can provide a much-needed remedy…

Assume that a divorce decree says that a payment is to be made to an ex-spouse. Does that mean that it is alimony the ex-spouse has to report as income for Federal income tax purposes?  And if not, can the ex-spouse who receives the payment request a ruling from the IRS to say that the…