Zuba & Associates, P.C.

Divorce situation could trigger Internal Revenue Service audit

Few people like to hear the phrase "Internal Revenue Service," and they especially may loathe getting letters from this organization. Their fear typically is founded in the fact that an Internal Revenue Service audit may cause one to have to pay back taxes or potentially incur other penalties, depending on a person's situation in Illinois. In some cases, the stressful experience of being audited can easily follow a divorce, and if one's spouse was the person who appears to have triggered the audit, there are some protections available.

The Internal Revenue Service might decide to audit an individual because of his or her ex-spouse. In this situation, the individual may wish to take advantage of "innocent spouse" relief if he or she is totally innocent. The fault in this case would be assigned to the proper spouse.

The separation of liability relief also is available if a spouse failed to correctly report an item on a joint tax return. The innocent ex-spouse would not have to pay any additional tax owed to the Internal Revenue Service. Equitable relief furthermore is available for an individual if the tax amount reported on a joint tax return was correct, but the tax bill was not paid.

Getting a divorce certainly can be a scary event not only emotionally but also financially, if one doesn't know what to expect. However, understanding the laws and knowing how to protect one's interests when addressing matters such as asset distribution may help to make the process smoother. Each divorcing spouse has the right to pursue his or her own best interests while also considering the other party's wishes in Illinois.

Source: Forbes, Divorce Causes Tax Audits, Cameron Keng, Feb. 10, 2014

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Rockford, IL 61107

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