Innocent Spouse Relief: Guides, Types, Rules & Forms
When you file a joint return with your spouse, both of you are liable for all tax, penalties, and interest. Therefore, the IRS or the states can legally go after both spouses or just one spouse for the entire bill. Unfortunately, even if you get divorced and the decree says that your ex is responsible for the bill, the IRS can still go after you. Luckily, there is innocent spouse relief (ISR).
ISR applies in situations where it would be unjust to hold both of you responsible for the tax liability. If you qualify, you are not liable for your spouse or ex-spouse’s taxes. In some cases, you may just want to split the tax liability. There are three categories of IRS innocent spouse relief.
This is based on the original type of innocent spouse relief. There are specific qualification requirements, and the issue must be related to an understatement of tax owed. Fortunately, if the IRS accepts your request, the IRS does not hold you liable for the tax amount owed related to your spouse/ ex-spouse.
With this type of relief, the IRS allocates the taxes between you and your spouse/ex-spouse, as if you filed separately. Allocation does not have to be half and half. It varies based on who’s responsible for what. Furthermore, you must be separated or no longer married to qualify.
You can apply for this type of relief if you have understated or underpaid tax. Equitable relief helps people who don’t qualify for the other types of relief. Therefore, you must prove that it would be unfair for the IRS to hold you responsible.
If you believe that you should not be held responsible for taxes owed because of erroneous information provided by your spouse, you may be eligible for innocent spouse relief. Innocent spouse relief may also be available if your spouse failed to disclose important information, or if you were unaware of an underpayment or understatement of tax.
To request innocent spouse relief, you must file Form 8857 with the IRS. You must complete and sign the form under penalties of perjury, and include a statement explaining why you believe you should qualify for innocent spouse relief. If you are requesting innocent spouse relief from joint and several liability for tax, interest, and/or penalties, you must also attach a copy of your federal income tax return for the year in question.
Once your Form 8857 is received, the IRS will send you a notice requesting additional information or documentation if needed. Once all required information has been received, the IRS will review your case and make a determination. If innocent spouse relief is granted, you will no longer be held responsible for the unpaid taxes, interest, and/or penalties. If your request is denied, you have the right to appeal the decision.
Questions and answers to commonly asked questions about innocent spouse relief, equitable relief, and separation of liability
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