Some years back my dad had a mental break and cashed out his retirement and incurred tens of thousands of dollars in tax obligation to the IRS. He left the state and possibly the country and my stepmom was burdened with the tax debt where the IRS has over the years taken money from her bank account and taken her tax refunds. She’s basically a single mom of two kids and lives seperately in an apartment she rents. My dad brought her over from Vietnam and her English isn’t very good as well as her knowledge of the many laws and systems that make up our financial system. My question is would she be a candidate for innocent spouse relief or is she basically pigeon holed into paying offf the debt until it’s completely paid off. My dad is back in town now living as a sort of nomad and he has no intentions of paying the tax debt.
Edit: just some added information. They previously filed taxes jointly but my dad has multiple accounts where he has his the money he accumulated over the years that he cashed out as well. He also doesn’t help my stepmom financially at all. None of the money my dad took from his retirement account my stepmom has benefitted from.
Can my stepmom be considered for Innocent spouse relief
byu/Alwaystrying95 intax
Posted by Alwaystrying95
3 Comments
Are they still married? Do they live together?
She *might* qualify, but there’s some other info that is needed.
In the meantime, she might qualify for Currently Not Collectible status.
Maybe, but she should contact the local Low Income Taxpayer Clinic to see if she qualifies for their help:
https://www.taxpayeradvocate.irs.gov/about-us/low-income-taxpayer-clinics-litc/
They can represent her before IRS if she signs Form 2848. You can also act as her representative if you are willing with the same form – you would fill it out as a family member.
https://www.irs.gov/forms-pubs/about-form-2848
https://getcarefull.com/articles/instructions-irs-form-2848-power-of-attorney
She doesn’t need to give you authorization to sign a tax return – I think the instructions on that site are more helpful than the official Form 2848 instructions.
She can only recover whatever was levied from her bank account and taken from her refund over the last two years. Filing for Innocent spouse relief should pause any future levies, but won’t necessarily pause the tax refunds being taken.
If it’s going to take awhile to get the Innocent spouse relief form filed she should contact IRS and request a hold on levies. That will be a temporary hold unless she can demonstrate that the levies are causing financial hardship.
https://www.irs.gov/businesses/small-businesses-self-employed/what-if-a-levy-is-causing-a-hardship
She can also call Taxpayer Advocate Service to request a hold on levies if it’s causing a financial hardship – their number is 877-777-4778 and they are open Monday – Friday from 7am to 7pm.
Usually for hardship situations IRS will request Form 433-F to evaluate the taxpayer’s financial situation. You can help fill that form out before she calls:
https://www.irs.gov/pub/irs-pdf/f433f.pdf
There are some expenses where you can use allowable amounts instead of actual amounts:
https://www.irs.gov/businesses/small-businesses-self-employed/collection-financial-standards
Edit to add: I forgot to mention that IRS generally has 10 years to collect on tax debt – it doesn’t last forever. Applying for Innocent spouse relief pauses that ten-year time frame, which means IRS would have more time to collect if they don’t approve the relief request.
Also I’m not sure if she filed a tax return for 2025 yet but if not she might be better off filing for an extension for 2025. I don’t know if she will qualify for Offset Bypass Refund (OBR) but she can request that from Taxpayer Advocate Service **before** she files her tax return – if she can prove a significant financial hardship will occur without receipt of the refund she might be able to still get a refund even if there’s a balance due. It’s very difficult to get OBR approved though.
Possibly too late, but why would your mom be responsible for tax due to her husband cashing out HIS retirement?