IRS, Taxes and Domestic Abuse

IRS, taxes and domestic abuse are not topics you would normally think being related to each other in any way; however, this blog is intended to show that when it comes to domestic abuse, the taxpayer who has been subjected to such abuse, has rights that can assist and protect them  from their spouse (or former spouse).  As you might imagine (and you would be correct), this blog has nothing to do with a self-directed IRA LLC, self-directed IRA Trust or a self-administered 401(k) plan (also referred to as a Solo-K, Uni-K, Individual K Plan, etc.).  So why am I writing about it?!   This IRS-generated content is definitely intended to assist such individuals.

How Does the IRS, Taxes and Domestic Abuse Relate to Each Other?

Doesn’t take a brainiac to know that the IRS and taxes are definitely related to each other, but how does the IRS, taxes and domestic abuse relate to each other?  Experts say that when an individual suffers domestic abuse, it is often not only physical, mental and emotional abuse….but also financial.  We’ve all heard the sad stories of a spouse being abused physically, mentally and emotionally, and then being isolated from financial matters by their spouse is just another form of abuse.  Please read the IRS’ Life Cycle series on domestic abuse and the rights and obligations of such taxpayers.

For example, while a taxpayer has obligations to pay taxes (big shock there), they also have rights…some of these rights might be very beneficial for a spouse suffering from domestic abuse.  Specifically:

  1. You can file a single tax return even if you are married;
  2. You do not have to sign a joint return unless you are fully prepared to sign the return;
  3. You can review all the supporting documents when filing a joint return;
  4. You can refuse to sign a tax return;
  5. You can request more time to file and sign a joint tax return;
  6. You can request prior years tax returns from the IRS;
  7. You can seek independent legal advice.

IRS, Taxes and Domestic Abuse — Innocent Spouse Relief

As the name suggests, innocent spouse relief is available to a spouse who may need legal relief from their tax responsibilities when they meet the criteria of the innocent spouse program.  Typically, an innocent spouse might qualify if their spouse (or former spouse) misreported/understated taxable income or otherwise falsified pertinent information on the couple’s tax return…with the innocent spouse not even knowing what the spouse (or former spouse did. (personal note: I have a sister who was married to a tax attorney (no less) and was going through cancer and a divorce at the same time.  My sister found out later that not only did her soon-to-be ex-husband falsify information on the tax return, he forged her name and also forged her name on the IRS tax return check…and, of course, keeping the entire tax return himself).    While a spouse may or may not have been subjected to physical domestic abuse, they can certainly suffer emotional or mental domestic abuse through financial abuse.  This financial abuse is bad enough as it is….it can be further exacerbated when the abused spouse also has tax reporting (and liability) requirements of their own.   To qualify for innocent spouse relief, the affected spouse must:

  1. You filed a joint return;
  2. There is an understated tax on the return that is due to erroneous items of your spouse (or former spouse);
  3. You can show that when you signed the joint return you did not know, and had no reason to know, that the understated tax existed; and,
  4. Based on the facts and circumstances that may be involved in the taxpayer’s situation, it would not be fair to hold the taxpayer responsible for the understated tax.

IRS, Taxes and Domestic Abuse — Pertinent IRS Forms

Form 8857

Application for Innocent Spouse Relief

Publication 504

Publication for Divorced or Separated Individuals

Publication 971

Publication for Innocent Spouse Relief

Individuals who are subjected to domestic relief should know their IRS rights.

As always, the information provided is intended to be educational in nature.  It is not intended, nor should it be interpreted as, any form of tax, legal, financial or investment advice.  Please consult with your respective professional in all such matters.