Most divorcing couples simply want to move on and begin new lives. From a financial standpoint, this usually means leaving behind old debts and financial problems that ruined the marriage. Unfortunately, tax problems created by an ex-spouse could raise their ugly heads years later, and an unsuspecting spouse could be accused of tax fraud because of a former spouse’s actions merely by signing a return that contained false information.
As a matter of law, signing a joint return means that the signers had reasonable knowledge of the information contained in the return. But a number of spouses (primarily women) had no idea of how their finances were handled, and simply trusted their spouses to provide accurate information. As such, they were not necessarily compliant in committing tax fraud, and would be entitled to petition the IRS for equitable relief (i.e. relief from joint tax liability).
In the past, seeking such relief would mean years of litigation to clear an innocent spouse’s name. However, the Internal Revenue Service (IRS) changed its stance in such cases, especially with abused spouses.
Basically, the IRS now recognizes that abused spouses (both physical and/or emotional), rarely challenge the veracity of a return, or refuse to sign it; for obvious reasons. These spouses may also have their signatures forged to hide refunds they would be legally entitled to, even though obtained through fraudulent means.
With IRS examiners having more discretion to review these circumstances, it is helpful to have an experienced attorney involved. If you have questions about tax issues stemming from your previous marriage and how they may affect your divorce, an experienced family law attorney can advise you.