Joint Return Test
Candlefocus EditorThe Joint Return Test is triggered when joint filers prepare a federal income tax return (Form 1040), declaring both the filers’ universal Social Security number and the same address. When the IRS finds two people with the same address filing with a single Social Security number, it looks closely at the return to ensure that no falsification or deception has occurred.
To determine that the joint filing is legitimate, the IRS looks for consistency and accuracy with regard to income, expenses, deductions, and credits being claimed. The Joint Return Test is conducted to detect any lack of commonality between the returns of married taxpayers or any attempt to benefit from filing jointly.
For instance, the IRS looks for discrepancies between a single filer’s return and a joint filer’s return. For instance, the single filer may list $50,000 in income, while the joint filing returns state that the filers earned $98,000 combined—a difference that may indicate that the joint filing was done in error.
In addition, the Joint Return Test checks to ensure that the deductions, exemptions, and credits reported are legitimate. This includes things such as checking to ensure that only one dependency exemption is taken, as well as ensure that the credits claimed are valid.
The Joint Return Test is also used to ensure that the shared income between two filers is reported correctly. If, for example, two spouses have both worked, the IRS will ascertain whether they have reported the same amount of income each. It will also ensure that the income reported by each filer is consistent with the other items on their joint return.
If the IRS detects any indications of fraud or misrepresentation in a joint return, it will flag the return for further review and may even impose a penalty for such deceptive behavior. As such, it’s important for all taxpayers to be mindful of the Joint Return Test to ensure that their filing is completely accurate.