Lion EA Posted July 30, 2014 Report Share Posted July 30, 2014 OK, I don't need these forms very often so always get them confused. Does someone have a short description of the difference? It came up in a phone call from a client. Before they came to me, they were already on a payment plan. Will that mean that wife has accepted husband's debt, and neither form would work? Debt arose during their marriage, from husband's business where only he did his bookkeeping. She may be divorcing him and wants to separate herself from his debts now. Any tips? Quote Link to comment Share on other sites More sharing options...
Lee B Posted July 30, 2014 Report Share Posted July 30, 2014 As I understand it, Innocent Spouse relates to understated tax due to erroneous information that only the other spouse was aware Injured Spouse is when a potential refund on a joint return is seized and applied to the other spouses debts i.e., Past Due Income Tax, Child Support, Student Loan, Overpaid Unemployment Benefits. In this case, you didn't say whether or not there was an understatement of tax due to erroneous information. If the correct tax returns were filed originally, you probably don't have any relief available. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted July 30, 2014 Report Share Posted July 30, 2014 Well, the Injured spouse is one who, for example, married him/her AFTER the tax debt was incurred, and in that case, only the funds belonging to the t/p owing the debt will be seized. The innocent spouse is one who did not BENEFIT from the unreported income. It's not just that one of them did not KNOW about it, if, for example, they lived in a bigger, nicer home, drove better cars, etc, than their reported income justified, the IRS is not going to buy the innocence argument. 3 Quote Link to comment Share on other sites More sharing options...
Lion EA Posted July 30, 2014 Author Report Share Posted July 30, 2014 Thanx, folks. Since coming to me (a referral from a good client) they did not have a refund and were under-withheld enough I don't think the innocent spouse would've had a refund with or without her husband. But, she has a new job and new withholding as of mid-2014. And, nothing had left his Schedule C bank account so did not benefit the family. She was thinking about prior years, and I didn't look at those as thoroughly as I now wished as it was during the crush of tax season. I'll start with the innocent spouse instructions and go from there... Quote Link to comment Share on other sites More sharing options...
KEYWEST_RICKS Posted July 30, 2014 Report Share Posted July 30, 2014 i always thought i understood this but now i am doubting myself. my client married someone in 2013. he owes back taxes from roughly 5 years ago. 2013 was the first year they filed joint return i included an injured spouse form with the return. she still has not received her refund and she claims to me that during a phone call she had with the IRS .... they informed her that she should not have filed injured spouse form with her return..... that she had to complete an innocent spouse return and submitt to the irs. i dont believe that what the IRS told her is correct....... or am i the one missing the boat here Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted July 30, 2014 Report Share Posted July 30, 2014 i always thought i understood this but now i am doubting myself. my client married someone in 2013. he owes back taxes from roughly 5 years ago. 2013 was the first year they filed joint return i included an injured spouse form with the return. she still has not received her refund and she claims to me that during a phone call she had with the IRS .... they informed her that she should not have filed injured spouse form with her return..... that she had to complete an innocent spouse return and submitt to the irs. i dont believe that what the IRS told her is correct....... or am i the one missing the boat here I have clients filing injured spouse that took 4 months to receive the refund. I always file the 8379 with the return. The IRS person is ill-informed and not properly trained. This has become the standard for phone help at the IRS. Tell your client to stop calling the IRS and be patient. 1 Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted July 31, 2014 Report Share Posted July 31, 2014 i always thought i understood this but now i am doubting myself. my client married someone in 2013. he owes back taxes from roughly 5 years ago. 2013 was the first year they filed joint return i included an injured spouse form with the return. she still has not received her refund and she claims to me that during a phone call she had with the IRS .... they informed her that she should not have filed injured spouse form with her return..... that she had to complete an innocent spouse return and submitt to the irs. i dont believe that what the IRS told her is correct....... or am i the one missing the boat here You were right. 3 Quote Link to comment Share on other sites More sharing options...
WITAXLADY Posted August 3, 2014 Report Share Posted August 3, 2014 New ;law for Innocent spouse in last 2 years - can apply and file from here on out to be not a part of the payment.. Form 8857 It probably will not help the back years but forward it does. Am in the process of one right now since I found out about this from a WI seminar with Scioli and Associates out of Saginaw MI - excellent firm for this and OIC... 2 Quote Link to comment Share on other sites More sharing options...
Lion EA Posted August 4, 2014 Author Report Share Posted August 4, 2014 This has been a great update on this topic. Thanx, all. 1 Quote Link to comment Share on other sites More sharing options...
michaelmars Posted August 4, 2014 Report Share Posted August 4, 2014 I just got my decision in my NY tax case involving my client being innocent. The hearing officer agreed with us and cancelled all assessments against my client. this was for sales tax and the spouse put the business in her name since he had partners in his main business and wasn't allowed to own another company in a similar field. 5 Quote Link to comment Share on other sites More sharing options...
bertrans Posted August 13, 2014 Report Share Posted August 13, 2014 i always thought i understood this but now i am doubting myself. my client married someone in 2013. he owes back taxes from roughly 5 years ago. 2013 was the first year they filed joint return i included an injured spouse form with the return. she still has not received her refund and she claims to me that during a phone call she had with the IRS .... they informed her that she should not have filed injured spouse form with her return..... that she had to complete an innocent spouse return and submitt to the irs. i dont believe that what the IRS told her is correct....... or am i the one missing the boat here As other commenters have noted, the 'advice' given by the IRS fellow was plainly and simply wrong and bespeaks someone who wouldn't know the difference between a bowl of jelly and apoisonous jelly fish. The provisions of innocent spouse necessarily presuppose the existence of a marriage; therefore, whatever the spouse may have done prior to the marriage is moot. Now, as to injured spouse: although this shouldn't happen, nevertheless, if A marries B in 2013 (jointly), and A has liabilities that precede the marriage, the IRS computer is programmed to offset any refund from spouse B (after marriage) to spouse A's liabilities: spouse B should indeed file an 8379 with the original joint return (as a pre-emptive matter) - AND THE IRS MUST RESTORE THE OFFSET. PS: I don't use caps often - but the galloping ignorance on the part of the IRS person simply frosts my drawers. Yes, as someone here observed, it is getting worse, much worse. 2 Quote Link to comment Share on other sites More sharing options...
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