Published Thursday, March 11, 2021

Saying “I do” doesn’t necessarily mean you’re responsible for your spouse’s or ex-spouse’s debts, according to the Internal Revenue Service, IRS.

According to the IRS, this debt could be for any number of things, child support, spousal support, a federal debt, student loans, or federal tax debt, and you file your taxes using the Married-Filing-Joint tax filing status, the IRS can apply your refund to one of these debts, which is known as an “offset.”
 
Or they can take collection action against you for the tax debt you and your spouse owe, such as filing the Notice of Federal Tax Lien or issuing a levy.

There is a loophole. If you’re not legally responsible for the past-due amount, you may still be entitled to receive your share of the refund or request relief from joint and several liabilities, depending on the facts of the situation, the IRS said in its report.

According to the report, in some situations, you may agree that you are responsible for the debt. If this is the case, you can either do nothing and let the refund be applied or if that doesn’t cover the entire debt, you can seek payment options with the agency the debt is owes.

But if you feel you are not responsible for the debt, the IRS provides two ways to request relief – through Injured Spouse and Innocent Spouse Procedures.

An injured spouse status involves obtaining a refund of a spouse’s interest in an overpayment that has been offset by the IRS.
 
Innocent spouse status relieves a spouse of the responsibility for paying taxes that are owed jointly and severally with the other spouse.


According to the IRS, the following are two procedures for which someone may be eligible based on the particular facts and circumstances:

Injured Spouse: You can request that you be treated as an injured spouse if you filed a joint tax return and all or part of a refund is taken to pay a debt owed only by your spouse and not you. See the short video that explains what an injured spouse means and when to file a claim.

Innocent Spouse: In general, if you do a married filing, both individuals are responsible for federal taxes owed. This is called joint and several liabilities, meaning the IRS can collect a joint liability from either you or your spouse even if you’ve divorced after you filed a joint tax return.

However, for instances involving an individual earned income or self-employment taxes only, by requesting innocent spouse relief, the partner can be considered for relief of responsibility from paying tax, interest, and penalties, if your spouse (or former spouse) improperly reported items or omitted items on your tax return, IRS said in its report.

For example, Household Employment Taxes, Individual Shared Responsibility payments, and business taxes and trust fund recovery penalty for employment taxes are not eligible for innocent spouse relief.

The three types of relief available are: Innocent spouse relief, Separation of liability and Equitable relief.

Each type of relief has different requirements. Find more information on those relief forms on the  IRS Taxpayer Advocate Services site.

What have you heard about expats facing problems paying ex-spouse debts?  We would like to know your thoughts on this story. Send your comments to news@amcostarica.com

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