Definition — Innocent or Injured?

Thanks for sharing!

Image source: Kevin Fillips (Own work) [CC-BY-3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons

Image source: Kevin Fillips (Own work), via Wikimedia Commons

Perry Mason was able to solve the case of the Injured Innocent. Of course, Mr. Mason never had to deal with tax law, where spouses are either innocent or injured, but generally not both.

You’re an injured spouse when you file a joint tax return and your share of an expected refund was used to offset debts your spouse legally owes, such as past due federal or state tax, or student loans. As an injured spouse, you file Form 8379, Injured Spouse Allocation, to get your share of the joint refund.

You’re an innocent spouse when you file a joint return and your spouse omitted income or incorrectly reported items  you didn’t know about and which caused an understatement of tax. In that case, you don’t want to pay tax that’s properly attributable to your spouse, and you file Form 8857, Request for Innocent Spouse Relief.

The difference between injured and innocent confuses both taxpayers and their legal representatives.

In T.C. Memo. 2014-243 (Palomares), the taxpayer separated from her husband in 2005. For tax years 2005 through 2008, she filed her federal income tax returns as head of household.

The IRS applied the refunds from those years to an unpaid liability on a 1996 federal return she had filed jointly with her husband.

A legal clinic helped the taxpayer file Form 8379, Injured Spouse Allocation, in an attempt to obtain the refunds.

The IRS denied the request, stating the taxpayer had used the wrong form.

***

Note: Taxing Lessons provides a summarized version of sometimes lengthy court decisions. The full case may include facts and issues not presented here. Please use the link provided to read the entire case.

***

Other posts you might enjoy

Definitions — Not so strictly confidential Image source: Public domain via Wikimedia Commons   You've probably heard the old joke about life's two rules. The first one is to never give out all the information. That's a rule the IRS follows and most of the time you're probably happy they do. But for identity theft victims, the ...
Definitions — Paying the piper Image source: Edmund Evans, Public domain, via Wikimedia Commons   Whether you believe the expression comes from the Pied Piper of legend or the old proverb, paying the piper does not always mean you get to call the tune. Sometimes the one who makes the rules gets to choose the music. Th...
Definition — Fun with statistics Image source: openclipart.org Keep calm, it's only statistics, and according to author Rex Stout, there are only two kinds – the kind you make up and the kind you look up. The IRS generates statistics (presumably of the second kind) at a heady pace, and the Spring 2017 Statistics of Income Bulle...
Definitions — The great depreciation   Section 179 depreciation, a tax provision that currently allows taxpayers to write-off up to $500,000 for 2016 ($510,000 for 2017), has been around long enough that you may think you're very familiar with the rules. Here's a quiz to check your knowledge. 1. In what year was section 1...
The IRS explained that “Form 8379 is valid for married filing joint returns only” and that the taxpayer “may have intended to file Form 8857 for innocent spouse relief.”

Editorial note: The IRS sent a copy of Form 8857 with the explanation. The taxpayer eventually completed the correct form and obtained partial relief. The remainder was denied because the statute of limitations had run.

Posted in Taxing Definitions Tagged with: , , ,