Innocent Spouse

Effective strategies for fighting liability for errors or fraud on joint returns.

Filing a joint tax return has many advantages for married couples, but it also establishes a responsibility for the taxes that are joint and several. This means that each person is legally responsible for the entirety of the taxes. If one spouse files a fraudulent return, then skips out to South America, the IRS can come after the second spouse for deficient taxes, penalties and interest under the theory of joint and several liability. Similar scenarios are not uncommon. Fortunately, the Law Offices of Alan F. Segal & Associates has the knowledge and experience to help innocent spouses in Illinois and nationwide who get drawn into tax controversies due to the actions of their spouse. For more than 45 years, our attorneys have provided a sympathetic ear and taken decisive action to protect innocent spouses from crushing liability.

Legal protections for co-signatories of joint returns

The law recognizes that not every co-signer of a joint return is financially sophisticated or actively involved in the couple's finances. Trusting spouses who sign tax documents in a strictly pro forma manner may escape liability if they qualify under an IRS innocent spouse exception.
Three types of relief are available:

  • Innocent Spouse Relief — If, on your joint return, your spouse claimed improper credits or deductions, improperly reported income or failed to report income, you may be eligible for relief on the additional taxes owed.
  • Separation of Liability Relief — If your former or estranged spouse improperly reported or failed to report income on a joint return, you can be found to be responsible for only the portion of the additional tax the IRS allocates to you.
  • Equitable Relief — If you don't meet the innocent spouse or separation of liability criteria, the IRS may still grant relief based on fairness for errors generally attributable to your spouse. This relief applies to filing errors that result in additional taxes, and properly filed taxes where sums are still owed.

Establishing innocence in sophisticated age

Innocent spouse is a legal designation that is getting harder and harder to prove. In bygone days, it was generally presumed that a husband handled the finances and his wife lived on the allowance he granted her. As women now are a majority in the workforce, and are earning the majority of college and advanced degrees, there no longer is a rebuttable presumption that the wife is unsophisticated and detached from the couple's finances. A financially savvy wife is more likely than ever to be viewed as a party to tax evasion and slapped with a wage garnishment or bank levy. Segal & Associates examines the totality of your circumstances, including demonstrable patterns of behavior regarding family finances to make the best case possible for an innocent spouse exception. Our experience representing clients in IRS proceedings and before the U.S. Tax Court has prepared us to present compelling arguments for our clients' relief.

The Law Offices of Alan F. Segal & Associates successfully represents co-signers of tax returns in IRS hearings, audits and collection procedures.
To schedule a consultation, call us at 312-444-1700.