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Can you face legal consequences if your spouse filed the taxes?

On Behalf of | Nov 29, 2021 | Tax Law |

The Internal Revenue Service (IRS) handles paperwork related to income taxes and takes action against those who do not fulfill their tax obligations. If someone makes a mistake when filing their taxes or intentionally tried to evade their tax obligations, the IRS might take enforcement action against that individual.

You would likely never have thought much about your spouse wanting to be the one to file your household tax return. After all, all of that financial paperwork is nothing more than a headache. If your spouse would willingly assume that obligation, you were likely happy to turn that responsibility over to them.

Unfortunately, your shared tax returns might put you in a legally vulnerable position if your spouse made mistakes or committed tax evasion on your return. Could you face legal penalties because of something your spouse did while filing the taxes?

The IRS recognizes that one spouse can trick the other

Trusting your spouse does not make you a bad person or a criminal, but it may implicate you in a tax controversy. Especially if you provided all of your financial information, like your income, to your spouse, you probably just assumed that what they submitted to the IRS was accurate. You may have signed the tax return without reviewing it at all.

Now that your spouse faces accusations of tax crimes or has already pledged guilty, you may worry that you could also face charges or that you could become financially responsible for your spouse’s taxes. Thankfully, the IRS does have a program to protect those who were not aware of and did not participate in their spouse’s tax fraud or evasion. Innocent spouse tax relief can protect you from financial liability for the unpaid taxes, interest and fees your spouse incurred while handling your marital tax returns.

Who qualifies for innocent spouse relief?

The IRS does not automatically exempt spouses from prosecution or financial responsibility due to tax fraud or other tax controversies. You have to qualify based on the IRS’s rules. You must have filed a joint return. You must be able to claim that you did not know about the understatement of taxes owed. You also must not have made any questionable transfers with your spouse recently.

If you do qualify, you can potentially protect yourself and your assets from actions by the IRS. Learning more about how the IRS handles major tax issues can lead to better decisions when dealing with a tax controversy.