What is Innocent Spouse Relief and Who Qualifies?
Many taxpayers who are married choose to file joint returns with their spouses. While this
provides some benefits, filing jointly also makes both taxpayers jointly and severally liable for
any additional tax, interest, or penalty that results from the joint return. This means that each
taxpayer is individually liable for the entire liability, even if only one spouse earned all the
income claimed on the return or improperly claimed certain deductions and credits.
However, requesting innocent spouse relief may relieve a taxpayer from liability for their
spouse’s tax debt, even if the liability arose from a jointly filed return. This relief only applies to
individual income and self-employment taxes and relieves the requesting taxpayer from paying
tax, interest, and penalties if their spouse improperly reported or omitted items on a joint tax
return and the taxpayer did not know or have reason to know of this error.
Another form of relief similar to innocent spouse relief is separation of liability relief. This form
of relief again requires that the taxpayer did not have knowledge of the improperly reported
item, and allows for the separate allocation of tax owed between the taxpayer and their former
spouse or a spouse they are legally separated from or not currently living with. Additionally, if a
taxpayer does not qualify for innocent spouse or separation of liability relief, they may qualify
for equitable relief. This allows for relief from an understatement or underpayment of tax if it
would be unfair, given all the facts and circumstances, for the taxpayer to be held liable. For
example, taxpayers who experienced spousal abuse may qualify for equitable relief.
There are a number of conditions that must be met in order for a taxpayer to qualify for
innocent spouse relief. First the taxpayer’s joint return must have an understatement of tax
that is solely attributable to the spouse’s error. Secondly, and most importantly, the taxpayer
must establish that at the time of signing the joint return they did not know and had no reason
to know that there was an understatement of tax. Additionally, it must be unfair to hold the
taxpayer liable for the understated tax given all the facts and circumstances of the situation.
Finally, the taxpayer and their spouse cannot have transferred property to one and other in an
attempt to defraud the IRS or another third party.
If a taxpayer believes they meet the conditions for innocent spouse relief or separation of
liability relief, they must request the relief no later than two years after the date the IRS first
attempted to collect the tax. If a taxpayer believes they meet the conditions for equitable relief,
it must be requested before the Collection Statute Expiration Date (CSED) for the assessed tax.
All of these forms of relief can be requested by filing form 8857 with the IRS.
If you believe you qualify for innocent spouse relief and wish to seek legal assistance, you can
reach out to the Low Income Taxpayer Clinic by calling (812)-339-7668.
For more information on innocent spouse relief, visit here:
https://www.irs.gov/businesses/small-businesses-self-employed/innocent-spouse-relief
For information on and access to form 8857, visit here: https://www.irs.gov/forms-pubs/about-form-8857
For information on other forms of relief from a spouse’s liability, visit here:
https://www.irs.gov/taxtopics/tc205#:~:text=Joint%20and%20several%20liability%20means,claimed%20improper%20deductions%20or%20credits.
Megan Burtis,
Low Income Taxpayer Clinic Law Clerk