Innocent Spouse Relief

Posted by Siegel Tax Law on December 11, 2012

Most married taxpayers file joint tax returns.  Each spouse is liable for the entire tax and any additions to tax, interest, or penalties, even if they later divorce. Joint and several liability means that each taxpayer is legally responsible for the entire liability. Thus, both spouses are held responsible for all the tax due even if one spouse earned all the income or claimed improper deductions or credits. A divorce decree making one spouse responsible to pay the tax does not change the joint and several liability.

In some cases, however, a spouse (or former spouse) can get off the hook.

A taxpayer must meet all of the following conditions to qualify for “innocent spouse relief:

  • A joint return was filed, which has an understatement of tax (deficiency), resulting from the other spouse’s erroneous item. An “erroneous item” includes income received by the other spouse, but which was omitted from the joint return. Deductions, credits, and property bases are also erroneous items if they are incorrectly reported on the joint return;
  • At the time the taxpayer signed the joint return, she did not know, and had no reason to know, that there was an understatement of tax; and,
  • Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understatement of tax.

The IRS will attempt to notify the other spouse of the request for innocent spouse relief.  To seek innocent spouse relief, the taxpayer should submit a completed Form 8857.