EMD Attorneys successfully appeals a Tax Payer who received a notice from the for the IRS claiming that they owed taxes related to her ex-husbands business. The IRS withheld her refund check claiming it was necessary to pay the tax liability of her ex-husband who owned his own business.
This case fell squarely into the “Innocent Spouse” Defense. Essentially there are circumstances when the IRS will try to impose tax liability for penalties, non-filing and non-payment on a spouse these usually arise in business situations. The IRS will seek to impose liability on a spouse. The critical element of the defense is that the spouse needs to prove they had no knowledge of participation in the tax preparation, the workings of the business or any other involvement in the financial operation of the business — hence the term “Innocent Spouse.”
We were able to show in a hearing that the spouse had no involvement in the business, the estrangement had been significant between the two and we could