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Innocent Spouse Relief

Many married taxpayers choose to file a joint tax return because of the benefits to be derived from this filing status. On a joint return, both taxpayers are jointly and individually responsible for the tax and any interest or penalty due on the return, even if they later divorce. This is true even if a divorce decree should state that your former spouse will be solely responsible for any amounts due on previously filed joint returns.

The situation can exist, then, where one spouse could be held responsible for all the tax due, even if all the income was earned by the other spouse. In cases like this, the IRS, in the interest of equity may allow a spouse in such a situation to be relieved of tax, interest, and penalties that are due on the joint tax return.

The situation could exist when one spouse who knows nothing about the filing of the tax return, finds himself or herself responsible for the tax liability of the other spouse. In this case, he or she may be considered an innocent spouse.

By requesting the innocent spouse relief, you can be relieved of the responsibility for paying tax, interest, and penalties, if your spouse (or former spouse) improperly reported items, or omitted items on your joint tax return. To request the innocent spouse relief, you need to file Form 8857, Request for Innocent Spouse Relief, with the IRS.

An innocent spouse can get relief when the other spouse makes false reports on a joint tax return. The IRS offers innocent parties a way to get out from under tax debt liability that is the result of mistakes or errors made by the other party on a joint tax return. The IRS created the innocent spouse relief because situations do arise where it would be unfair to hold a spouse liable for the tax liability that was created by the other spouse.

It is very important that the innocent spouse relief should not be confused with the injured spouse allocation. By requesting innocent spouse relief, you can be relieved of the responsibility for paying tax, interest, and penalties if your spouse (or former spouse) improperly reported or omitted items on your joint tax return. If the relief is granted, the tax, interest, and penalties that qualify for the relief, will be collected only from your spouse (or former spouse).

However, you are jointly and individually responsible for any tax, interest, and penalties that do not qualify for the relief; and the IRS will collect these amounts from either you or your spouse (or former spouse).

After you file Form 8857, it is the IRS, which will figure the amount of the liability (if any) that you are responsible for; you are not required to figure this amount yourself.

You must meet all of the following conditions, to qualify for the innocent spouse relief:

• You filed a joint return, which has an understatement of tax, due to erroneous items (defined below) of your spouse (or former spouse).

• You can 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.

• You are able to prove that the understatement of tax did not bring a significant benefit to you. The deception would not be considered a significant benefit simply because your spouse supports you.

• Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understatement.

• You and your spouse (or former spouse), did not transfer property to one another as part of a fraudulent scheme. A fraudulent scheme includes a scheme to defraud the IRS or other third party, such as a creditor, ex-spouse, or business partner.

Erroneous items can fall into either of the following category:

• Unreported income. This is any gross income received by your spouse (or former spouse) that is not reported.

• Incorrect deduction, credit, or basis. This is any improper deduction, credit, or property basis claimed by your spouse (or former spouse).

The primary objective of this article is to empower taxpayers to learn to do their own taxes. For more information on how to deal with injured/innocent spouse situations, grab yourself a copy of “Doing Your Own Taxes is as Easy as 1, 2, 3,” ($6.98) on



Milton G Boothe is an IRS Enrolled Agent with over twenty years of tax and financial accounting experience, including several years at PricewaterhouseCoopers. He is also a British certified Chartered Accountant. He is currently employed in private tax practices where he helps people resolve their tax problems, minimize their taxes, and routinely represents the interests of taxpayers before the Internal Revenue Service. As an Enrolled Agent (EA) Boothe is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the IRS for audits, collections, and appeals.
Milton G Boothe is also the author of several tax publications, wherein he encourages people to empower themselves by learning to do their own taxes.