This section answers questions commonly asked by taxpayers about innocent spouse relief.
What is joint and several liability?
When you file a joint income tax return, the law makes both you and your spouse responsible for the entire tax liability.
This is called joint and
several liability. Joint and several liability applies not only to the tax liability you show on the return but also to any
additional tax liability
the IRS determines to be due, even if the additional tax is due to the income, deductions, or credits of your spouse or former
spouse. You remain
jointly and severally liable for taxes, and the IRS still can collect from you, even if you later divorce and the divorce
decree states that your
former spouse will be solely responsible for the tax.
How can I get relief from joint and several liability?
There are three types of relief for filers of joint returns: “innocent spouse relief,” “separation of liability relief,” and “equitable
relief.” Each type has different requirements. They are explained separately below.
What are the rules for innocent spouse relief?
To qualify for innocent spouse relief, you must meet all of the following conditions.
-
You must have filed a joint return which has an understated tax.
-
The understated tax must be due to erroneous items of your spouse (or former spouse).
-
You must establish that at the time you signed the joint return, you did not know, and had no reason to know, that there was
an understated
tax.
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Taking into account all of the facts and circumstances, it would be unfair to hold you liable for the understated tax.
-
You must request relief within 2 years after the date on which the IRS first began collection activity against you after July
22,
1998.
What are “erroneous items”?
Erroneous items are any deductions, credits, or bases that are incorrectly stated on the return, and any income that is not
properly reported on
the return.
What is an “understated tax”?
You have an understated tax if the IRS determined that your total tax should be more than the amount actually shown on your
return. For example,
you reported total tax on your 2006 return of $2,500. IRS determined in an audit of your 2006 return that the total tax should
be $3,000. You have a
$500 understated tax.
Will I qualify for innocent spouse relief in any situation where there is an understated tax?
No. There are many situations in which you may owe tax that is related to your spouse, but not be eligible for innocent spouse
relief. For example,
you and your spouse file a joint return on which you report $10,000 of income and deductions, but you knew that your spouse
was not reporting $5,000
of dividends. You are not eligible for innocent spouse relief because you have knowledge of the understated tax.
What are the rules for separation of liability relief?
Under this type of relief, you allocate (separate) the understated tax (plus interest and penalties) on your joint return
between you and your
spouse. The understated tax allocated to you is generally the amount you are responsible for. To qualify for separation of
liability relief, you must
have filed a joint return and meet either of the following requirements at the time you file Form 8857.
-
You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you
are requesting
relief. (Under this rule, you are no longer married if you are widowed.)
-
You were not 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.
Why would a request for separation of liability relief be denied?
Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the
following situations.
-
The IRS proves that you and your spouse transferred assets to one another as part of a fraudulent scheme.
-
The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise
to the deficiency
that are allocable to your spouse.
-
Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax.
What are the rules for equitable relief?
Equitable relief is only available if you meet all of the following conditions.
-
You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community
property
law.
-
You have an understated tax or underpaid tax. See Note later.
-
You did not pay the tax. However, see Refunds, earlier, for exceptions.
-
The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts
and
circumstances.
-
You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme.
-
Your spouse (or former spouse) did not transfer assets to you for the main purpose of avoiding tax or the payment of tax.
-
You did not file or fail to file your return with the intent to commit fraud.
-
The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the
joint return.
For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief, earlier.
Note. Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief
from an underpaid tax. (An underpaid tax is tax that is properly shown on the return, but has not been paid.)
How do state community property laws affect my ability to qualify for relief?
Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
Generally, community
property laws require you to allocate community income and expenses equally between both spouses. However, community property
laws are not taken into
account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any
relief from liability.
How do I request relief?
File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. You must file an additional Form 8857 if you are
requesting relief for more than three years.
When should I file Form 8857?
If you are requesting innocent spouse relief, separation of liability relief, or equitable relief, file Form 8857 no later
than two years after the
date on which the IRS first began collection activities against you after July 22, 1998. If you are requesting relief from
liability arising from
community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857.
Where should I file Form 8857?
Use the address shown in the instructions for Form 8857.
I am currently undergoing an examination of my return. How do I request innocent spouse relief?
File Form 8857 at the address shown in the instructions for Form 8857. Do not file it with the employee assigned to examine
your return.
What if the IRS has given me notice that it will levy my account for the tax liability and I decide to request relief?
Generally, the IRS has 10 years to collect an amount you owe. This is the collection statute of limitations. By law, the IRS
is not allowed to
collect from you after the 10-year period ends.
If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. But interest
and penalties
continue to accrue. Your request is generally considered pending from the date the IRS receives your Form 8857 until the date
your request is
resolved. This includes the time the Tax Court is considering your request.
After your case is resolved, the IRS can begin or resume collecting from you. The 10-year period will be increased by the
amount of time your
request for relief was pending plus 60 days.
What is “injured spouse relief”?
Injured spouse relief is different from innocent spouse relief. When a joint return is filed and the refund is used to pay
one spouse's past-due
federal tax, state income tax, child support, spousal support, or federal non-tax debt, such as a student loan, the other
spouse may be considered an
injured spouse. The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation.
You are considered an injured spouse if:
-
You are not legally obligated to pay the past-due amount, and
-
You meet any of the following conditions:
-
You made and reported tax payments (such as federal income tax withholding or estimated tax payments).
-
You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional
child tax
credit.
-
You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum
tax.
Note. If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item
(1)
above applies.
