The focus of our practice in Rochester, New York is federal and state taxpayer representation. We encounter many taxpayers who could have significant tax debt due to their spouses or ex-spouses tax issues. Either from non-filing or simply playing games with the book and records, the spouse (or soon-to-be former spouse) now has a financial headache. The innocent spouse may not have to pay the back taxes to the IRS and New York State Department of Tax & Finance (NY DTF).
There are three forms of innocent spouse relief available from the IRS:
- Innocent Spouse Relief
- Division of Joint Liability
- Equitable Relief
To seek relief under (1) Innocent Spouse Relief or (2) Division of Joint Liability the spouse pursuing tax relief needs to demonstrate the liability is due to an error or omission that they were not aware of at the time they signed the return. Also, it would be inequitable to hold them responsible for the IRS and/or NYS DTF tax liabilities. For relief under (2) Division of Joint Liability the spouses must either be divorced or have been separated for at least 12 months at the time the relief is sought. The advantage of (2) Division of Joint Liability relief is the tax liability is separated so the innocent spouse is treated as if they had filed separately. While, (1) Innocent Spouse Relief simply assigns the liability based on the percentage of the income they each earned.
(1) Innocent Spouse Relief or (2) Division of Joint Liability relief is available for under reported income. For underpayments of income, the taxpayer must use (3) Equitable Relief, requires that based on all the facts and circumstances, it would be unfair to hold the spouse liable. The underpayment of income tax is where the spouse creates a return showing estimated tax payments, withholding, etc. and in reality they never made the payments, so the tax for the period is correct but the liability exists because the payments listed on the return were never made.
The New York State Department of Tax & Finance also allows innocent spouse relief, and often will simply follow the decision by the IRS.
If you have any questions about IRS or and New York State Department of Tax & Finance innocent spouse cases or other IRS tax issues in Rochester, New York or elsewhere please feel free to contact me at (585) 210-7405 or by email at jasonzukoski@integratedtaxresolutions.com.
Jason Zukoski
Integrated Tax Resolutions / 585Tax
395 Helendale Rd.
Rochester, NY 14609
Ph. (585) 210-7405
jasonzukoski@integratedtaxresolutions.com
www.integratedtaxresolutions.com / www.585tax.com
Rochester, NY • Buffalo, NY • Syracuse, NY