Can property and wages of an innocent spouse without a tax liability be factored in by the IRS to determine the “ability to pay” of the tax-liable spouse in an Offer in Compromise?
Yes. Although the IRS cannot legally claim a nonliable spouse’s assets or income, the IRS, when negotiating settlements, nevertheless considers spousal assets and will make every effort to have you borrow from your spouse so you can increase your offer. Most spouses cooperate, whether from misunderstanding their rights of hoping their cooperation will facilitate settlement with the IRS.
Related Questions
- Can property and wages of an innocent spouse without a tax liability be factored in by the IRS to determine the "ability to pay" of the tax-liable spouse in an Offer in Compromise?
- I have a financial hardship and cannot pay my joint tax liability. Do I qualify for innocent spouse relief based on my financial situation?
- When a spouse doesn report income to the IRS, is the innocent spouse liable for the taxes?
