Innocent Spouse Relief

Many married couples choose to file joint income tax returns because of the benefits of doing so, which can include substantial tax savings.  When filing a joint tax return, both husband and wife are jointly and severally liable for the tax that is owed; in other words, both spouses are legally responsible for the tax, interest, and penalties that may result from filing the joint tax return, even if they later divorce.  However, in certain circumstances, one spouse may be able to get relief from joint and several tax liability, in the form of innocent spouse relief.  If one spouse acted improperly in some way, such as by failing to report income, or falsely claiming certain deductions or tax credits, then the other spouse may not be liable for the tax owed as a result of those acts, if he or she is qualified for innocent spouse relief.

What is Innocent Spouse Relief?

You may not be liable for tax that is owed, even if you filed a joint tax return with your spouse or former spouse, if you are eligible for innocent spouse relief.  In order to qualify for innocent spouse relief, you must have filed a joint tax return that understates the tax that is owed.  This understatement of tax owed must be due to some improper action on the part of your spouse, such as omitting taxable income from the tax return, or claiming erroneous deductions and/or tax credits.  Next, you must be able to demonstrate that you did not know, and had no reason to know, at the time you filed your tax return that your spouse had understated the tax that was due.  Furthermore, the Internal Revenue Service (IRS) must determine that due to the facts and circumstances surrounding the filing of your joint tax return, it would be unfair to hold you jointly and severally liable for the understated tax on your tax return.  Finally, keep in mind that even if you live in a community property state, and you used the “married filing separate” status for filing your tax return with your spouse or ex-spouse, you might still be eligible for innocent spouse relief.

Claim for Innocent Spouse Release

In order to apply for innocent spouse relief, you must complete IRS Form 8857, or a written request that contains the same information contained on Form 8857, and submit it to the IRS.  Once it receives your request for innocent spouse relief, the IRS is required to notify your spouse or ex-spouse of your request, and allow him or her to submit information relevant to your request.  The IRS will then determine whether you are entitled to innocent spouse relief, and contact you with its decision.

Tax Help to Relieve Joint Tax Liability

If you believe you are entitled to innocent spouse relief, you may want to consult with your tax preparer or a tax attorney for assistance in determining whether you might be eligible for relief.  A tax preparer or attorney can also assist you in filing the appropriate paperwork with the IRS in order to establish your entitled to innocent spouse relief.