IRS Injured Spouse Relief Provisions

By Joel N. Crouch on January 30, 2017

 

Last year the Treasury Inspector General For Tax Administration (TIGTA) issued a report on the IRS track record in injured spouse cases. The full report is here. Although similar to the more well-known innocent spouse relief provisions, the injured spouse relief provisions do not relieve the injured spouse of a joint liability on a valid jointly filed return. Instead, the injured spouse provisions allow the injured spouse to request that the IRS return the portion of a joint refund taken to offset a debt of the non-requesting spouse. The background portion of the TIGTA report explains the intent and procedure for filing for injured spouse relief:

    Internal Revenue Code Section 6402 requires the Internal Revenue Service (IRS) to apply
    a taxpayer’s tax refund to any past-due Federal tax debt, child or spousal support debt,
    Federal agency nontax debt (such as a student loan), or State income tax obligation
    before issuing a refund. Applying a tax refund to a past-due debt is referred to as a
    refund offset. If a taxpayer files a joint tax return resulting in a refund, that refund
    may be used to pay the past-due amounts of either spouse’s debts. However, the
    IRS can refund all or a portion of a refund if the taxpayer qualifies as an injured spouse.
    An injured spouse is a taxpayer who files a joint tax return for which all or part of his or
    her share of the tax refund was, or is expected to be, applied against the other spouse’s
    past-due debt. A taxpayer qualifies as an injured spouse if he or she is not required to
    pay the past-due amount and meets any of the following criteria:

        1.  The injured spouse made and reported tax payments (e.g., Federal income tax
             withholdings from his or her wages or estimated tax payments).

        2. The injured spouse had earned income (e.g., wages, salaries, or self-employment
             income) and claimed the earned income credit or the additional child tax credit.

        3. The injured spouse claimed a refundable tax credit, such as the premium tax credit or
            the refundable credit for prior year minimum tax.

    If a taxpayer believes he or she qualifies as an injured spouse, he or she should file a Form
    8379, Injured Spouse Allocation, with the IRS to get back his or her share of a refund. The
    IRS instructs a taxpayer to attach a Form 8379 to his or her original tax return either when
    submitting a paper tax return or when filing electronically. If a Form 8379 was not filed with the
    original tax return, the IRS instructs a taxpayer to submit a paper Form 8379 to any one of 10
    IRS campuses based on where the taxpayer filed the original return.

The Form 8379 is here . The instructions for the Form 8379 are here .

Some interesting notes from the TIGTA report include the following:

    1.  In both 2014 and 2015, the IRS received and processed more than 360,000 injured
         spouse claims.

    2.  91% of the claims were accurately processed.

    3.  The IRS has 45 days to resolve an injured spouse claim or it must pay interest on any
         amount refunded.

    4.  In 30% of the claims, the IRS took more than 45 days to process a claim and ultimately
         had to pay interest on the amount refunded.

   5.  The IRS paid interest of $2.7 million for 159,174 of the 530,581 injured spouses cases
        resolved from January 1, 2014 to May 28, 2015 as a result of not timely resolving the       
        cases.

For any questions on this or any other tax-related matter, please feel free to contact me at (214) 749-2456 or jcrouch@meadowscollier.com.

     





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