Are You an Innocent Spouse?

Posted by Amanda on March 23, 2011

Many married couples file a joint tax return, which means that they report their combined income and deduct their combined allowable expenses on the same tax form. This is because tax liabilities together may be less than tax liabilities if married and filing separately.

However, if one spouse falsely fills out tax information or makes a mistake that results in an understatement of tax liability, the other spouse is responsible for the tax and any interest or penalty due on the joint return. This is true even if all of the income was earned by the other spouse, if a spouse passes away, or if there is a divorce.

However, there are three types of relief from joint spouse responsibility: innocent spouse relief, separation of liability, and equitable relief. We’ll discuss each below.  

Innocent Spouse Relief

The IRS innocent spouse relief will provide you relief from additional tax you owe if your spouse or former spouse failed to report income, reported income improperly, or claimed improper deductions or credits.

In order to use the innocent spouse claim, you must have filed a joint tax return which has an understatement of tax that is directly related to your spouse’s erroneous items, show that at the time you signed the return you had no idea that there was erroneous information understating tax liabilities, and establish that it would be unfair to hold you accountable for this tax liability.

Separation of Liability

Separation of liability applies to joint filers who are divorced, widowed, legally separated, or who have not lived together for the 12 months ending on the date the relief form is filed.

In order to qualify for this relief you must meet just one of the following conditions:

  • You are divorced or separated
  • You are widowed
  • You have not been a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file Form 8857.

Once again, you cannot have had any knowledge of the understatement of tax liability at the time the joint return was filed.

Equitable Relief

This may apply when the other two spouse reliefs do not apply, or when the correct amount of tax was reported on your joint return but the tax remains unpaid, or there was an understatement of tax liability due to a reporting error. In order to qualify for this relief, you must establish that it would be unfair to hold you liable for the understatement or underpayment of tax liability.

You can file for spouse relief from any amount of tax liability. To file any of these options, you need to fill out IRS Form 8857. To see if you qualify, check out the Innocent Spouse Tax Relief Eligibility Explorer.

In general, you must request relief no later than two years after the IRS attempts to collect the tax liability from you (there are some exceptions to this). For more information, check out IRS Publication 971, Innocent Spouse Relief.

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