I am confused and have received some conflicting advice. If I set up a payment plan for the 2006 debt prior to filing and file jointly will the IRS take our return to offset the debt ? Or would we be better off filing separately ? I do know there are disadvantages to filing separatey I am currently unemployed and a full time student any return would bey helpful, we are working with the IRS to come up with a payment plan. Thank you in advance for your advice. Recomendations would be very helpful.
Even if you are in a payment plan the IRS will take any refund due to you (or your spouse if you file a joint return) to pay the back amounts owed. If you and your spouse would be due a refund if you a file joint you may want to consider filing as married filing separate. But you need to weigh this with the loss of deductions.
The above statements are provided as general information and not intended as legal advice. Each matter has its own set of unique circumstances that cannot be adequately addressed without consultation. You are strongly advised to hire an attorney licensed to practice law in your state to represent you.
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Your spouse may file for injured spouse relief if they take her portion of the refund, even if you file jointly. Additionally, the IRS could seize both of your refunds even if you file separately. This is a helpful resource. http://www.irs.gov/irm/part25/irm_25-018-005.html
THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction. The answer to question does not create an attorney-client relationship or otherwise require further consultation. Mrs. Cook is licensed to practice law throughout the state of California with offices in San Diego County. She is authorized to handle IRS matters throughout the United States, and is also licensed to practice before the United States Tax Court. IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by the IRS, please be advised that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used or relied upon, and cannot be used or relied upon, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
A payment plan would be a really good start. You shoud also take a good look at the 2006 return and consider having it amended. There is often a way to resolve or reduce the debt by amending. Call our Chandler, AZ office if you need help.
Evan A. Nielsen is licensed to practice law in California and handles federal tax matters throughout the U.S. The information provided here is for educational purposes only and is not intended as legal advice for a particular matter. This response does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult an attorney.
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