Divorcing in Texas...do i need to file for innocent spouse relief??

Question

My husband and I have been separated since March of 06. However, we lived together during Jan & Feb of 06 and Sept-Dec of 06...which is roughly 6 months. He worked a full time job making $22k for the year plus cash jobs on the side and I only worked Nov. and Dec of 06 full time and substitue taught the rest of 06 probably making less than $3K total. We have 2 children ages 8 and 9. We have finally decided to go through with our divorce right here at tax time and I wasnt exactly sure how to file so we each filed separate extentions. I was wondering if I need to file for innocent spouse relief because he works on the side making cash and I have no idea of exactly how much he made for the year doing side jobs. Should we file joint with an innocent spouse relief form or should i file separately to avoid any liability issues???

Answer 1

Since you have knowledge of his side income that evidently he is not going to report, you are not eligible to file for innocent spouse relief if you choose to file a joint return with him.

If your spouse is not going to declare his income, you should file a separate return. Since you lived with him for some time during the last half of 2006, your only option is to file married filing separately.

In fact, with only $3K of income, you are not required to file at all. You would only get your withholding back.

Answer 2

Filing as married filing separately would be a good idea since you know that he's committing tax fraud - if you sign a joint return, you're equally liable. By filing separately, you wouldn't be.

If he did this in prior years, and you filed jointly, you're responsible right along with him for those years.

You would only file the innocent spouse form if he (and you) are assessed additional tax liability. You have to state under penalty of perjury that you didn't know of the additional income, and had no reason to know of it - that doesn't sound like the case, from your question. Since you knew about his side work, you're not eligible for innocent spouse relief for any year where you filed a joint return.