Thursday, May 13, 2010

IRS Injured Spouse Relief

My law firm’s Tax Relief Blog posted a very informative new article earlier this week discussing IRS Injured Spouse relief. Unfortunately, there are thousands of taxpayers across the country who have run into IRS debt problems because of their spouse or ex-spouse and the IRS has established certain programs – like Injured Spouse Relief – to help these taxpayers. You can find a snippet of the blog entry below, but be sure to read the full article on the Tax Relief Blog.

Dealing with a back tax debt of your own can be stressful enough, but being held responsible for the back tax liability of a spouse – or former spouse – can be even more trying. Fortunately, there may be relief from being held responsible for your spouse’s or ex- spouse’s back tax liability.

The general rule is: when a couple files a joint federal tax return, the IRS will hold both taxpayers responsible for any unpaid tax debts. The IRS will even keep any refund available and apply it to a past due tax liability—even if the couple later begins to file separately but incurred the original debt while filing jointly. Some taxpayers might file separately to avoid a withheld refund, but this can cause the couple to miss out on valuable tax advantages for married taxpayers. This blog entry will explain the basics of the IRS’s Injured Spouse Relief program.

What is an Injured Spouse and what is the Relief the IRS Provides?

For federal tax purposes, an Injured Spouse is someone that is denied a tax overpayment refund or a portion of a refund because the funds were applied to off-set a past-due obligation of a spouse or ex-spouse. This obligation can be a past-due federal tax, state income tax, child or spousal support or even a federal “non-tax” debt, such as a student loan. In this case, the spouse is injured because they do not have a legal obligation to the past-due amount but by having their overpayment applied to the liability, the IRS is in fact holding the person responsible for the debt.

Continue reading at RoniDeutch.com…