Friday, September 7, 2012

Instructions for Injured Spouse Relief Application

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Injured Spouse Relief is an assistance provided by the Irs to protect a spouse who filed a tax return jointly from being denied a rightful quantum of refunds because of liabilities that are due by the other spouse. If you file a joint tax return, the refunds due from the tax return could be applied to past liabilities such as trainee loans and other federal debts that are not tax related. In other words, before you receive your refunds, Uncle Sam will make sure that you have no other superior debts yet to be paid. Any unpaid debts will be paid off with your repayment money before the remaining number reaches you. However, if the reductions on the tax refunds are wholly or partly due to the debts of only one spouse, the other spouse can apply for Injured Spouse Relief to not have their quantum of the repayment confiscated to satisfy or pay off the other spouse's debts. The Injured Spouse Relief affects the distribution of refunds and is dissimilar from the Innocent Spouse Relief, which seeks allocation of a tax debt. There are some rules that apply for the qualification of an Injured Spouse Relief:

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To qualify for the relief, you must have filed a joint tax return. The return must have tax credits, such as the Earned earnings Tax Credit(Eitc) that warrant for a tax refund.
To qualify for the relief, the tax repayment must be applied to various financial obligations and the spouse seeking the relief must not be legally liable for these obligations. This way, the Irs can distribute the quantum of the tax repayment due to the "injured" spouse while the other quantum of the repayment is used to meet the superior financial obligations of the other spouse.
The spouse seeking the relief needs to apply for it straight through the Irs by filing Form 8379, "Injured Spouse allocation Form". This should not be confused with the Form 8857, "Request for Innocent Spouse Relief," which is only used in the cases of Innocent Spouse Relief.
The Form 8379 can either be filed separately when an "injured" spouse finds out that his or her refunds are being applied to other spouse's debts or the form can also be filed together with joint tax refunds. The form can be filed electronically straight through the e-file system if you decree to file electronic returns. On the other hand, if you are filing your tax returns on paper, attach the Form 8379 to your return - Form 1040 (or 1040A/ 1040Ez) - and indicate "Injured Spouse Application" at the top left projection of the tax return form.
When Form 8379 is filed separately, you need to indicate both the collective security numbers of both spouses in the same way they appeared on the joint return in ask and have the form signed (by the injured spouse).
For taxpayers living in a society asset state, some more exact rules apply as indicated in the Irs Publication 555 - society Property.

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