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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10105
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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2014 - husband filed tax returns and made a mistake on money

Customer Question

2014 - husband filed tax returns and made a mistake on money that he had taken out of his 401. We were not living together at the time, but not legally separated.
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: The IRS found the mistake and began sending just me the adjustment. He listed me as " Head of House". I have since received a divorce and in the divorce they ruled in my favor that he should pay that bill. I believe he initially contacted them spring of 2016 and set up a payment plan. I received a week ago that he has defaulted on those payments and they are now seeking for me to pay the bill. How am I to proceed? Do I have any recourse?
JA: Is there anything else important you think the Accountant should know?
Customer: We both have jobs - He works at at Bank in Seattle making 80,00 and I am a Nutrition making about 50,000. We have one child and he pays child support in the amount of 750 per month.
Submitted: 2 months ago.
Category: Tax
Expert:  Lane replied 2 months ago.

Hi,

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Yes, you MAY be able to use something called innocent spouse relief.

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Normally any returns that are filed Jointly create a "jint and several" liability ... meaning that you are both liable for ALL of the tax.

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However, there are three types of relief from joint and several liability for spouses who filed joint returns:

  1. Innocent Spouse Relief provides you relief from additional tax you owe if your spouse or former spouse failed to report income, reported income improperly or claimed improper deductions or credits.
  2. Separation of Liability Relief provides for the allocation of additional tax owed between you and your former spouse or your current spouse from whom you are separated when an item was not reported properly on a joint return. The tax allocated to you is the amount for which you are responsible.
  3. Equitable Relief may apply when you do not qualify for innocent spouse relief or separation of liability relief for something not reported properly on a joint return and generally attributable to your spouse. You may also qualify for equitable relief if the amount of tax reported is correct on your joint return but the tax was not paid with the return.

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However, if you filed as Head of Household (where you are unmarried OR considered as unmarried by not licing together for the last 6 months of the tax year) you would IN NO WAY be liable for money he took from HIS 401(k) ... That would be HIS liability on HIS separtely filed tax return.

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Note: You must request innocent spouse relief or separation of liability relief no later than 2 years after the date the IRS first attempted to collect the tax from you. For equitable relief, you must request relief during the period of time the IRS can collect the tax from you

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To seek innocent spouse relief, separation of liability relief, or equitable relief, you should submit to the IRS a completed Form 8857

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then there's also Injured spouse relief for allocation of refund.

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Relief from joint and several liability should not be confused with an injured spouse claim for allocation of refund. You are an injured spouse if you file a joint return and all or part of your share of the refund was or will be applied against the separate past-due federal tax, state tax, child support, or federal non-tax debt (such as a student loan) of your spouse with whom you filed the joint return. If you are an injured spouse, you may be entitled to recoup your share of the refund. For more information, see Form 8379 (PDF), Injured Spouse Allocation, or refer to Topic 203.

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Please let me know what questions you have from here

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Lane

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I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986.

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