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Is there any tax relief from the IRS for Innocent Spouses?
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tax owed to the IRS on a joint tax return but one spouse may be able to avoid tax liability
to the IRS through the application of what has
come to be known as the "innocent spouse doctrine." Under this
tax
doctrine, a spouse may be excused from tax liability to the IRS for tax and/or
tax penalties. The 1998
tax law broadened the definition of "Innocent Spouse Relief" so that relief from
IRS tax liability is now more available for those spouses who filed tax
returns jointly, yet the
circumstances demonstrate that it would be unfair for the IRS to hold both spouses equally responsible
for the joint tax liability. In many of these tax cases, a spouse is relieved of responsibility
to the IRS for tax, interest, and tax penalties on a joint tax return. This is called innocent spouse
relief.
Many married taxpayers choose to file a joint tax return
with the IRS because of certain
tax benefits
this filing status allows. Both taxpayers are jointly and individually responsible
to the IRS for the
tax and any interest or tax penalties due on the joint tax return even if they later divorce. This
is true even if a divorce decree states that a former spouse will be responsible
to the IRS for any
tax
amounts due the IRS on previously filed joint tax returns. One spouse may be held responsible
to the IRS for all
the tax due even if all the income was earned by the other spouse.
You must meet all of the following conditions to qualify for innocent spouse relief.
 | You filed a joint
tax return with the IRS which has a substantial understatement of tax directly related
to grossly erroneous unreported taxable income or the incorrect tax deductions,
tax credits or tax basis of your
spouse. Unreported taxable income is any gross taxable income item received by your spouse that is not
reported on the tax return to the IRS. Incorrect tax deductions, tax credits or tax basis are any tax deductions,
tax credits or tax basis of property claimed by your spouse on
the tax return filed with the IRS for which there is no basis in fact or
tax law. |
| You establish that at the time you signed the joint
tax return and filed it with the IRS you did not know, and had no
reason to know, that there was a substantial understatement of income or
tax. |
| Taking into account all the facts and circumstances, it would be unfair
for the IRS to hold you
liable for the understatement of tax. |
The tax law does not provide relief for an unpaid balance due shown on a
tax return.
You should file IRS tax Form 8857, Request
for Innocent Spouse Relief, in order to request tax relief from the
IRS.
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Related tax
information about Innocent Spouse relief |
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How to avoid an IRS audit?
How to prepare for an IRS audit?
What are my appeal rights?
What are the tax penalties and interest? Can they be
avoided?
How does the Statute of Limitations affect income tax
obligations?
How does the Bankruptcy Code affect income tax obligations?
Taxpayer Bill of Rights
Tax Audits, Tax Collections and trouble with the IRS |
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IRS publications about
Innocent Spouse relief:
For further information on innocent spouse relief refer to IRS
Publication 971, Innocent
Spouse Relief. For further information on the appeals process refer to Tax
Topic 151, Your Appeal Rights. Also see IRS Publication 1, Your Rights as a
Taxpayer, IRS Publication 5, Appeal
Rights, IRS Publication 556, Examination
of Returns, Appeal Rights.., and IRS Publication 17, Your Federal
Income Tax. |
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IRS Links:
IRS
Appeals
IRS Problem
Resolution Office
IRS
Taxpayer Advocate |
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Ask Julian Block your IRS and tax questions! |
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If you can't find the answer to your IRS or tax question in our
web you can call former IRS Special Agent and one of the country's foremost tax attorneys, nationally syndicated columnist ("The Tax
Adviser") Julian Block. Julian is also the tax Editor of Mutual Funds Magazine, America's premier investment magazine. To
call Julian for a tax consultation click
here. |
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