What is “Innocent Spouse Relief”?

Innocent Spouse Relief is a claim requesting relief from the Joint and Several Liability that accompanies a joint tax return.  There are three requirements for this claim to work:

  1. There must be an understatement of the tax that can be attributed to erroneous items of the other spouse.
  2. The innocent spouse did not know and had no reason to know about the erroneous items when he or she signed the return.
  3. It would be inequitable to hold the innocent spouse liable because they did not receive any benefit from the understatement or they were abused.

If the Innocent Spouse Claim is upheld the tax liability is split up between the two parties, usually by calculating two married filing separately returns. The results then are used to allocate a portion of the joint liability to each.

The Innocent Spouse Claim is confused many times with the “Injured Spouse Claim” which is a whole different kettle of fish. An injured spouse is someone who filed joint and had their part of the refund allocated to their spouse’s debt in which they were not liable. Almost always this is the result of a marriage in which one spouse had previous debt.

The Innocent Spouse Claim should also not be confused with fraud. Forged signatures or returns signed under duress are not valid returns. These cases, particularly the ones with forged signatures, have a good chance of being referred for criminal prosecution.

Innocent Spouse Claims are filed using form 8857. The injured spouse must make the claim within 2 years from the start of “significant collection activities”.  The date of a notice of intent to levy is the common starting date for filing these claims.

Author: Jim Payne

Jim Payne, a Florida Certified Public Accountant (CPA) since 1976, offers candid insights on getting square with the IRS — with the least pain, and at the lowest cost — with (or without) the help of a tax representative. Mr. Payne is a former IRS agent and expert in business profitability, IRS audits, IRS payroll tax, and IRS non-filer issues. As a Tax Representative, his goal is clear: " I will speak on your behalf to all IRS agents, so you never have to, and I'll guide you in executing a strategy to resolve your IRS problem so you can get back to enjoying life."

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