Filing taxes can be stressful, especially if an ex-partner makes a mistake that affects both parties. This scenario requires prompt action.
Understanding state laws and federal programs will help resolve issues efficiently when handling an ex’s tax errors.
Understanding joint liability
Washington State follows federal guidelines when determining tax obligations for married couples. When filing jointly, each spouse becomes responsible for the entire tax bill, even if only one person makes a mistake. This joint liability means that the IRS can hold both parties accountable for any underpayment or fraud unless a specific relief applies.
Identify the mistake
Before taking further steps, identify the error on the tax return. It could be a simple miscalculation, unreported income or even potential fraud. Carefully review past tax returns and compare them with personal financial records. Pinpointing the issue provides a clear starting point for corrective action.
Seek professional advice
Consult a tax professional to assess the situation. A licensed CPA, tax attorney or enrolled agent can offer tailored advice and explain eligibility for relief. In some cases, the issue may be resolved with an amended return, while in others, legal action might be necessary.
Apply for Innocent Spouse Relief
The IRS offers Innocent Spouse Relief to those who unknowingly signed joint returns containing errors made by an ex-partner. If eligible, this relief removes joint liability for erroneous tax payments, reducing the financial burden. To apply, submit IRS Form 8857 and provide details on why the ex-partner’s mistake should not affect the applicant. The process may take several months, so apply as soon as possible.
Consider other forms of relief
If Innocent Spouse Relief does not apply, consider other options like Separation of Liability Relief or Equitable Relief. Separation of Liability Relief divides the tax debt according to each spouse’s contribution to the error. Equitable Relief covers those who fail to qualify under other provisions but still face unjust financial consequences due to an ex’s actions.
Plan for future tax returns
Moving forward, avoid joint tax filing unless necessary. Individual filing prevents future joint liability and simplifies financial planning. Establishing a budget and tracking finances will help prevent similar problems in the future.
Mistakes happen, but understanding rights and legal options can protect against undue tax burdens caused by an ex-partner.