Unlike its name, this has nothing to do with physical or mental abuse. Injured spouse applies to a married taxpayer, who files married filing jointly, and has his or her refund taken by the IRS to pay back their spouse’s individual, older tax debts. To illustrate that, take the following scenario:
In 2005, Jim didn’t pay his tax debt of $1,000.00 to the IRS. The IRS never caught up with Jim, and he hasn’t been due a refund since. In 2009, Jim married Pam in Pennsylvania. Jim stays home to raise the kids, and Pam keeps working at her job at the paper company. In 2010, Pam and Jim file their 2009 tax return, married filing jointly. Because Pam adequately withheld from her pay check, a refund is due for $1,000.00. But because of the $1,000.00 Jim still owes from 2005, the IRS seizes Pam’s refund.
In the above example, Pam can file a Form 8379 with the joint tax return, and indicate that her refund should not be taken to pay off Jim’s old debts. Additionally, if this problem arises after the return is filed, Pam can still file the Form 8379, so long as it is within the statutory period for claiming a refund (generally three years).
I should note, if Pam and Jim lived in Texas, California, etc., which are community property states, there are a few separate rules. For more information on community property states and injured spouse relief, see IRS Publication 555.
Finally, if you believe the IRS has wrongly taken your refund, or your spouse’s refund, you may wish to consult a tax professional to determine if you are eligible for injured spouse relief or another possible solution. Here at Victory Tax Solutions, our staff and attorneys are skilled at analyzing these situations ahead of time, and working with the IRS to straighten out any confusion or wrongfully seized refunds.
Please feel free to call us at any time. Our toll free number is 877-772-0123.
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