Episode 15: In this episode, Timalyn discusses injured spouse tax relief: how do you know if you qualify, the difference between an "injured spouse" and an"innocent spouse" . She'll also provide information about the proper IRS form to use when filing for Injured Spouse Relief.
Click this link to go back and listen to the previous episode on Innocent Spouse Tax Relief.
What Qualifies You as an Injured Spouse?
To begin, you have to have filed a married filing jointly with your spouse. You then have a portion or all of your tax refund taken to satisfy a debt of your spouse's.
For example, perhaps your spouse owes back taxes from a previous year (even if it was before you were married). When you file as married filing jointly, the IRS now looks at both of you since your refund is also your spouse's refund. Your joint refund will be offset by their debt..
Can the IRS only Offset a Federal Tax Debt?
The IRS can offset your refund to satisfy federal tax debt, state tax debt and unemployment compensation debt. If your spouse owes back child support, the IRS can also take your tax refund to offset this debt. The IRS can also do this to satisfy other federal non-tax debts, such as outstanding student loans.
Seeking Injured Spouse Tax Relief
Regardless of whether you knew about your spouse's back tax situation or not, you may be able to seek relief for your portion of the tax refund that was taken.
Innocent Spouse Tax Relief
Remember, innocent spouse relief is valid if there was fraud on your returns that you didn't know about, or wouldn't have reasonably known about. This fraud could include an understatement of income or maybe your spouse used "creative deductions" to reduce your tax liability.
Be sure to go back and listen to Episode 14, if you think you qualify for Innocent Spouse Relief.
Protecting Your Tax Refund
If you know there's a chance your spouse has back tax issues, you can file IRS Form 8379 the Injured Spouse form. You should file this form with your tax return to prevent the IRS from taking your portion of the tax refund.
Can I File IRS Form 8379 after I Filed My Taxes?
Yes, you can file an 8379 after you file your taxes. It's possible you weren't aware of the back tax debt or other debts. You'll need to file it each year that your refund may be taken to satisfy the eligible debts.
How Long Do I Have to File Form 8379?
Timalyn explains that you must file the form within 3 years of the due date of the original return.
Timalyn recommends that you file the form electronically. The IRS has a significant backlog of returns. If you file the paper form, your form may get delayed or even lost. If you file electronically, it can reduce the processing time to about 11 weeks. If you're filing IRS Form 8379 after you've already filed your returns, the IRS takes about 8 weeks to process the form.
Consult with a Tax Professional
You should discuss this with your spouse and a qualified tax professional to help you file this form. There are important factors to consider, such as the proper allocation of your portion of the refund versus your spouse's portion. It's possible your W-4 withholdings may further complicate the allocation calculation.
Resources from Timalyn
Timalyn wants you to stay in control of your tax situation. The resources above will help you prepare to file your tax return with 8379 so that your tax refund is protected.
Do You and Your Spouse Owe $100,000 or more in Back Taxes?
Timalyn can help you. She has a free training on how to negotiate a $100,000 or more debt with the IRS. Click here to get access to the training. Feel free to share this training with other people.
As we conclude Episode 15, we encourage you to connect with Timalyn on social media. You'll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts and many other podcast platforms.
Remember, Timalyn Bowens is America's Favorite EA and she's here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today's episode.
For more information about tax relief options, visit https://www.americasfavoriteea.com/ .
If you have any feedback, or suggestions for an upcoming episode topic, please submit them here: https://www.americasfavoriteea.com/contact.
Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.
