Innocent Spouse Relief
Many married taxpayers choose to file a joint tax return because of certain benefits this filing status allows. Both taxpayers are jointly and severally liable for the tax and any additions to tax, interest, or penalties that arise as a result of the joint return even if they later divorce. Joint and several liability means that each taxpayer is legally responsible for the entire liability. Thus, both spouses are generally held responsible for all the tax due even if one spouse earned all the income or claimed improper deductions or credits. This is true even if a divorce decree states that a former spouse will be responsible for any amounts due on previously filed joint returns. In some cases, however, a spouse can get relief from joint and several liability.
If you request relief from joint liability, the IRS is required to notify the spouse with whom you filed the joint return of your request and allow him or her to provide information for consideration regarding your claim.
You must request relief no later than 2 years after the date the IRS first attempted to collect the tax from you, regardless of the type of relief you are seeking. Not all IRS attempts to collect the tax from you will trigger the two year period for filing a request for relief. Collection activities that may start the two year period are:
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- The IRS issues a section 6330 notice to you. A section 6330
notice is a notice that tells you that the IRS intends to levy and that
you have a right to a collection due process hearing
- The IRS
applies your income tax refund against an amount you owed on a joint
return for another year for which you seek relief and the IRS informed
you about your right to file a Form 8857
- The filing of a suit by the United States against you for the collection of the joint tax liability
- The
filing of a claim by the IRS in a court proceeding in which you were a
party or the filing of a claim that involves your property
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There are three types of relief from joint and several liability for spouses who filed joint returns:
Innocent Spouse Relief:
Provides 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.
You must meet all of the following conditions to qualify for "innocent spouse relief":
- You filed a joint return, which has an understatement of tax, directly related to your spouse's erroneous items.
- Any income omitted from the joint return is an erroneous item.
- Deductions, credits, and property bases are erroneous items if they are incorrectly reported on the joint return.
- You establish that at the time you signed the joint return you did not know, and had no reason to know, that there was an understatement of tax.
Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understatement of tax.
Separation of Liability Relief:
Provides for the allocation of additional tax owed between you and your spouse or former spouse because an item was not reported properly on a joint return. The tax allocated to you is the amount for which you are responsible.
To qualify for "separation of liability relief" you must have filed a joint return and must meet one of the following requirements at the time you request relief:
- You are divorced or legally separated from the spouse with whom you filed the joint return for which you are requesting relief.
- 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 (PDF), Request for Innocent Spouse Relief. If, at the time you signed the joint return, you had actual knowledge of the item that gave rise to the understatement of tax, you may not qualify for separation of liability relief.
Equitable Relief:
May apply when you do not qualify for innocent spouse relief or separation of liability relief for something not reported properly on a joint return. You may also qualify for equitable relief if the correct amount of tax was reported on your joint return but the tax remains unpaid.
You may qualify for "equitable relief" if you do not qualify for innocent spouse relief or separation of liability relief. Equitable relief is available for additional tax owed because of a reporting error (an understatement) or you properly reported the tax on your return, but you did not pay it (an underpayment). To qualify for equitable relief you must establish, under all the facts and circumstances, that it would be unfair to hold you liable for the understatement or underpayment of tax.
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