Tax Fraud and Innocent Spouses

On October 10, 2012, in Divorce, Family Law, by Jason Mays, Esq.

Innocent Spouse Doctrine

Tax Fraud and Innocent Spouses

Generally, when spouses file tax returns jointly, each spouse is liable for any understatement on the jointly filed return.  This means that, for example, a husband will be held liable if his wife understates her income, and vice-versa.  In a sense, this places a burden on each spouse to ensure that the other spouse’s income is reported correctly.

But what if one spouse hides income from the other?  Individuals that can convince a court that they did not know of their spouse’s unreported income when they filed the return may be considered “innocent.”  Innocent spouses will not be prosecuted by the taxing authority.  But if the innocent spouse benefits from the unreported income, that spouse still may have to contribute to the tax debt.  Additionally, in a divorce action, a matrimonial court may distribute liability for the debt between the spouses without regard to the innocent spouse rule.

Long Island Divorce Attorneys

If you have any questions about Family Law, Divorce, or other legal issues, the attorneys at the Law Firm of Vaughn, Weber & Prakope, PLLC can help.  Call our office at 516-858-2620 today.

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