IRS Innocent Spouse Relief
You’re not responsible for your spouse’s mistakes!
Are you held responsible for an error you didn’t make? If you didn't do it, you shouldn't pay for it. Fight back against the IRS with Innocent Spouse Relief. Get help from expert CPAs today!
Understanding IRS Innocent Spouse Relief: What is it?
IRS Innocent Spouse Relief is a provision by the IRS that offers a way out for spouses who find themselves in a tight spot due to the actions or inactions of their current or former spouse. Essentially, it provides a form of protection to a spouse from being held responsible for the tax liability created due to the erroneous items of the other spouse. These items could include unreported income or incorrect deductions, credits, or basis claimed by the other spouse on a joint tax return.
When you file a joint tax return, both spouses are held equally responsible for the tax liability, any interest, or penalties that arise from that tax return. This is what the IRS refers to as ‘joint and several liability,’ and it applies regardless of any divorce decree stating that one spouse will be solely responsible for the outstanding tax amount.
However, there are situations where holding both spouses responsible for a tax debt would be unfair. That’s where IRS innocent spouse relief comes into play. It allows one spouse to request not to be held responsible for the tax liabilities resulting from the inaccuracies of the other spouse.
Are you eligible for IRS Innocent Spouse Relief? Know from Former IRS Agents!
Joint Tax Return:
You must have filed a joint tax return with your spouse or ex-spouse.
Erroneous Items:
There must be an incorrect item on the tax return, such as unreported income or incorrect deductions or credits.
Unawareness:
You must prove that when you signed the joint return, you didn't know, and had no reason to know, about the erroneous item that led to the tax debt.
Unfairness:
It would be unfair, considering all the facts and circumstances, to hold you responsible for the tax debt.
Timing:
You must request innocent spouse relief no later than two years after the date the IRS first attempted to collect the tax from you.
Don’t know if you qualify for Innocent Spouse Relief? Get in touch with our expert CPAs. We can do the hard work for you!
Know the Different types of IRS Innocent
Spouse Relief with Prime Tax Solution!
Innocent Spouse Relief IRS
This relief is for individuals who filed a joint tax return and were unaware of their spouse’s understated tax or incorrect tax return. To qualify, you must prove that when you signed the joint return, you did not know, and had no reason to know, that your spouse understated or underpaid the tax debt.
Separation of Liability Relief
This type of relief allocates the tax liability, interest, and penalties between you and your spouse or former spouse. The amount for which you are responsible will only be the amount allocated to you. This relief is available to separated or divorced spouses or widows or widowers.
Equitable Relief
This relief may apply when you do not qualify for either of the first two types of relief. It is available for underpayments or understatements of tax. You may qualify for this relief if you can prove that it would be unfair to hold you responsible for the tax debt.
How to apply for IRS Innocent Spouse Relief?
Learn from Expert CPAs!
Here are the steps to apply for IRS Innocent Spouse Relief:
1. Understand the Criteria
First, make sure you meet the criteria for innocent spouse relief. You may qualify if you filed a joint tax return, and your spouse or former spouse improperly reported income or claimed incorrect deductions or credits.
2. Gather Documentation
Collect all necessary documents to support your claim. This includes tax returns, bank statements, correspondence with your spouse or former spouse, and any other documents that can prove your case.
3. Fill Out the IRS Spouse Relief Form
Complete Form 8857, Request for Innocent Spouse Relief. This form will ask for details about your finances, your marriage, and the tax years for which you are requesting relief.
4. Submit the IRS Form
Mail the completed Form 8857 to the IRS at the address listed on the form. Make sure to keep a copy for your records.
3. Fill Out the IRS Spouse Relief Form
Complete Form 8857, Request for Innocent Spouse Relief. This form will ask for details about your finances, your marriage, and the tax years for which you are requesting relief.
4. Submit the IRS Form
Mail the completed Form 8857 to the IRS at the address listed on the form. Make sure to keep a copy for your records.
5. Response from the IRS
The IRS will review your application and may request additional information. Provide any requested information as quickly as possible. The IRS will then make a decision about your application.
6. Appeal if Necessary
If the IRS denies your request, you have the right to appeal the decision. The IRS will provide instructions on how to do this in the letter denying your request.
Michael Sullivan
Former IRS Agent, Teaching Instructor,Fox and ABC News Contributor
What happens if my IRS Innocent Spouse Relief application is denied?”
“If your IRS Innocent Spouse Relief application is denied, you may be able to appeal the decision. Besides that, you can also negotiate a settlement with the IRS. These are times when expert guidance can be invaluable and that’s part of the reason why we are by your side.”
FAQs about IRS Innocent Spouse Relief
Innocent Spouse Relief is a provision under the Internal Revenue Service (IRS) Code that allows one spouse to seek relief from the joint tax liability that arises from a joint tax return. This relief is available if one spouse believes that the tax debt or any associated penalties and interest, were caused by the errors or omissions of the other spouse.
To be eligible for Innocent Spouse Relief, you must meet all of the following conditions:
- You filed a joint return which has an understatement of tax.
- The understatement of tax is due to erroneous items of the other spouse.
- 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.
To apply for Innocent Spouse Relief, you must file Form 8857, Request for Innocent Spouse Relief, with the IRS. It is recommended to file Form 8857 as soon as you become aware of a tax liability for which you believe you should be considered for relief.
Yes, there is a deadline for filing Form 8857. You must file Form 8857 no later than 2 years after the date on which the IRS first began collection activities against you after July 22, 1998.
Yes, you can still request Innocent Spouse Relief even if the IRS has already started collection actions against you. However, you must file Form 8857 within 2 years after the date on which the IRS first began collection activities against you.
After you file Form 8857, the IRS will conduct a preliminary review to determine if you are eligible for Innocent Spouse Relief. If the IRS determines that you are eligible, they will then conduct a thorough investigation to assess the validity of your claim. The IRS will notify your spouse or former spouse that you have filed for Innocent Spouse Relief and they have the right to participate in the process. If the IRS determines that you are entitled to Innocent Spouse Relief, any refund that you are entitled to may be applied to other debts that you owe to the IRS.
If your request for Innocent Spouse Relief is denied, you have the right to appeal the decision. You should receive a letter from the IRS explaining the reason for the denial and providing instructions on how to appeal. It is advisable to consult a tax professional or the IRS for guidance on the appeal process.
Yes, you can request Innocent Spouse Relief for multiple tax years. However, you must file a separate Form 8857 for each tax year for which you are requesting relief.
Apart from Innocent Spouse Relief, there are two other types of spousal tax relief available:
- Separation of Liability Relief: This relief allocates the additional tax owed between you and your former or estranged spouse according to each spouse’s contribution to the tax debt.
- Equitable Relief: This relief is available if you do not qualify for Innocent Spouse Relief or Separation of Liability Relief, but it would be unfair to hold you liable for the tax debt due to exceptional circumstances.
