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August 24, 2017


Innocent and not-so-innocent spouses: 3 things to know about marital tax debt

Most married couples file their taxes jointly. In part, this is a matter of convenience. But filing together also generally means a couple pays less in combined taxes than they would using married filing separate (MFS) status.

Filing jointly can be problematic, however, when one spouse has run up big tax debts while keeping the other in the dark about it or forced into acquiescence through abuse.

That is why the IRS has a type of relief from tax liability called the innocent spouse rule. In this post, we’ll take note of three things worth knowing about marital tax debt.

If you are still married but no longer trust your spouse, consider filing separately. 

When one spouse manages the money and the other has insufficient input into or awareness of decisions, the possibility for tax (and other) problems is always present. A spouse who dominates the couple’s financial life can hide assets or run up big tax debts – leaving the other spouse jointly liable for those debts.

If you don’t trust your spouse’s truthfulness, it might lead you to divorce. But even more immediately, in such a situation it may make sense to file taxes separately.

The innocent spouse rule applies to both spouses and ex-spouses.

Under the innocent spouse rule, a spouse or ex-spouse can avoid joint marital tax debt in cases where there has been wrongdoing or misconduct by the other spouse. 
You don’t have to get divorced first in order to claim innocent spouse relief. If the criteria are met, you can claim the relief regardless of your current marital status.

A divorce decree does not necessarily protect you from your ex’s tax problems.

It is certainly possible include a provision in your divorce decree that your ex take care of certain tax obligations. But your spouse may fail to follow through on those obligations. And if that happens, the IRS or a state revenue agency can still come after you for joint tax debt. This is one reason why the innocent spouse rule is so important.

Tax Controversy