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San Jose, CA tax debt relief attorneyWhen a married couple files a joint tax return, “joint and several liability” will apply to any tax debts related to that return. This means that if the Internal Revenue Service (IRS) conducts a tax audit and determines that the couple owes taxes due to erroneous information on their joint tax return, the spouses will be equally liable for paying these tax debts. This can sometimes come as a surprise, especially if a couple has gotten divorced since filing the joint tax return in question. Even if a divorce decree addressed tax issues and states that one spouse will be responsible for paying joint tax debts, the IRS can still pursue repayment from both spouses. However in some cases, a person may receive innocent spouse relief if they were not responsible for the tax debts.

Innocent Spouse Relief Eligibility Requirements

Innocent spouse relief may be available in situations where individual income taxes or self-employment taxes are owed to the IRS based on incorrect information on a couple’s joint tax return. To be eligible for innocent spouse relief, a person must be able to show that errors on a tax return were solely attributable to their current or former spouse. They will need to verify that when they signed the joint tax return, they did not know or could not reasonably have known about the errors.

A person may receive innocent spouse relief based on errors on a tax return related to unreported or misreported income or claiming of improper tax deductions, credits, or property basis. For example, if a person’s ex-spouse was a business owner, and they did not report all income earned through their business in a certain year, while also claiming tax deductions for business expenses without actually paying for those expenses, a tax audit may determine that taxes are owed. If the other spouse was not involved in the business and had no knowledge of the business’s finances, they may be eligible to receive innocent spouse relief, and the other spouse will be solely responsible for paying the tax debts.

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San Jose tax lawyer for IRS debt reliefThe coronavirus has dramatically impacted people’s lives in the United States and across the globe. Many individuals have been temporarily or even permanently laid off from work or have been forced to reduce their work hours significantly. The financial consequences of the virus itself and the attempts to curb the spread of the virus have left many families wondering how they will pay their bills. In a move to provide financial relief to struggling taxpayers in the United States, the Internal Revenue Service (IRS) has implemented a new program called the “People First Initiative.” The program provides relief for individuals and businesses through extended filing deadlines, postponed payments, and limited enforcement actions. The deadline for filing federal tax returns has been extended to July 15 and many states, including California, are also offering extensions for state tax returns.

Existing Installment Plans and Offers in Compromise

The IRS offers several options for taxpayers who cannot fulfill their tax obligations. One of these options is to pay their tax bill in installments over time through a payment plan called an installment agreement. Another option that is available in some situations is an “offer in compromise” (OIC). An OIC is an agreement between the IRS and a taxpayer with a tax debt that settles the debt for less than the original amount owed. Individuals who are paying off tax debt through an installment agreement may postpone payments until July 15 of this year. The IRS has also announced that it will not default on installment agreements during this time period. However, interest on the unpaid amount will continue to accumulate.

If you have a pending application for an offer in compromise, the IRS is increasing the amount of time you have to provide any requested documentation or information. The agency has also promised that it will not close any pending OIC requests before July 15 unless the taxpayer agrees to close the request. Those currently making OIC payments have the option to suspend payments until July 15, but interest will continue to accumulate. Furthermore, the IRS has stated that it will not default on OICs for individuals who are delinquent on their 2018 tax return during the relief period.

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San Jose, CA tax law attorney for expatriates

When an individual chooses to move to another country, he or she may relinquish his or her United States citizenship. However, many of these former citizens may not know that they have unfulfilled tax obligations to the United States. Unpaid back taxes can result in additional debt due to accruing interest as well as serious penalties. Fortunately, the Internal Revenue Service (IRS) recently announced the creation of several procedures through which former citizens can be relieved of their U.S. tax responsibilities.

Former Citizens Must Meet Certain Criteria for Tax Relief

If you are an expatriated person who is not currently compliant with U.S. tax laws, you may worry whether or not you can even afford to pay your back taxes. Unfulfilled tax obligations can quickly spiral out of control – especially when a person was not aware that he or she even owed back taxes. In an effort to help former citizens come into compliance with the law, the IRS is allowing qualifying individuals to be relieved of their tax obligations. These individuals must meet certain criteria in order to be eligible for tax relief. The criteria for “Relief Procedures for Certain Former Citizens” include:

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