“Innocent Spouse” Tax Issues After Virginia Divorce

When you file your taxes jointly during a marriage, the IRS holds both spouses responsible for the tax return's validity. This is true even if your spouse makes the majority of the income. This means that if there is any misrepresentation on a tax return, the IRS can hold both spouses liable.

Consider this liability when you are going through a Virginia divorce. If you are still legally married on December 31, you can file taxes as a married couple filing jointly. This often allows you to take more deductions and qualifies you for some exemptions. It is only a smart thing to do when you trust your ex-husband to be truthful with his portion of the return.

If the IRS ever questions a return, even if it is from many years before your Virginia divorce, both parties will be sought. You are able to claim an "Innocent Spouse" defense if you were not aware of the misrepresentations on the return. Keep in mind, though, that it is your burden to prove you are an "Innocent Spouse," which can be very difficult.

To meet the "Innocent Spouse" criteria you must:  

• have filed a joint return with your spouse that states an incorrect amount of income;
• prove that you did not know, or have any reason to know, that the income stated on the return is false; and
• prove that based on the circumstances, it would be unfair to hold you accountable for the misinformation.  

Proving "Innocent Spouse" criteria is difficult. The IRS will take into consideration whether you and your spouse are divorced and whether you received a benefit from the understatement of the tax. Your best strategy is to be involved in the preparation of your income tax returns while you are married and especially during your Virginia divorce proceedings.

Work closely with a Virginia divorce attorney and tax advisor to help protect your financial assets. An attorney and tax advisor can advise you on any tax issues that could result from your Virginia separation agreement or divorce settlement.

Contacting a Newport News Divorce Attorney

Throughout your divorce proceedings, you'll naturally have a lot of questions specific to your circumstances. Get your questions answered by requesting a complimentary copy of our guide, What Every Virginia Woman Should Know About Divorce, or reserving your seat at our monthly divorce seminar.

The Newport News divorce attorneys at Hofheimer/Ferrebee are committed to fighting for your rights, assisting in child custody disputes and advocating that you receive everything you are entitled to and need in order to start your new life.
 757-425-5200.