The innocent spouse rule and tax liability
New York residents who find themselves faced with the prospect of an unexpected tax bill may well need to review some actions taken by their spouses or former spouses. In some cases, one spouse may legitimately be unaware of errors on a tax return prepared by the other spouse and therefore wish to remove their personal liability for any tax debt associated with such errors. The Internal Revenue Service has what it calls the innocent spouse rule that may apply to people in this type of situation.
According to Bankrate, the innocent spouse rule may be used by people who are currently married but also by people who are separated or even divorced from their spouses. There are guidelines surrounding the types of situations that may qualify someone to claim themselves as an innocent spouse. The failure by one spouse to pay federal income taxes is not one of these situations.
Instead, the IRS explains that the innocent spouse rule was designed to provide protection and relief to people when some form of misrepresentation has been made on a tax return. This misrepresentation may or may not have been intentional. For example, if one spouse failed to report some income that was earned and the other spouse honestly was unaware of the earned income, this may provide grounds for the innocent spouse rule to be invoked.
It is important to note that if the spouses transferred property between them and such a transfer may be identified as relating to a fraudulent act, the innocent spouse rule may not be able to be used.