Innocent spouse relief is an Internal Revenue Service (IRS) procedure that allows a taxpayer to be relieved of the responsibility for paying taxes on a joint tax return.
This relief is available when one spouse or former spouse has reported income, deductions and credits incorrectly, resulting in an understatement of tax.
Innocent Spouse Relief does not absolve the taxpayer from any additional tax owed due to the incorrect reporting of facts and circumstances on the joint return, but it does protect them from being held responsible for that debt.
To be eligible for Innocent Spouse Relief, one must have no knowledge or reason to know that their spouse was filing incorrectly at the time they signed the return.
It is important to note that even if both spouses agree to file a joint return, only one can seek innocent spouse relief in case of an understatement of taxes due.
How Does Innocent Spouse Relief Work?
Innocent spouse relief is a process in which one spouse can request the IRS to be relieved of responsibility for any tax debt caused by their other spouse.
In order for the requesting spouse to qualify for this relief, they must meet certain criteria set by the IRS. The requesting spouse must demonstrate that they did not know and had no reason to know about their other spouse’s underpayment or unpaid taxes.
Additionally, the requesting spouse must show that it would be unfair for them to be held responsible for the taxes due since their other spouse was primarily liable.
If the IRS denies innocent spouse relief then both spouses will remain responsible for any outstanding tax debts.
How is it Different Than Injured Spouse Relief?
Injured spouse relief and innocent spouse relief are two different types of relief available to taxpayers.
Injured spouse relief is designed to help one spouse who filed a joint income tax return with another, and who is owed a portion of the refund but can’t get it because it was applied to the other spouse’s debt.
Innocent Spouse Relief is for a taxpayer who has signed a joint tax return that includes an understatement of tax due to erroneous items by their spouse or former spouse. In such cases, the IRS may absolve the innocent party from any liability for the understatement.
Both injured and innocent spouse relief can help taxpayers get out of debt even if only one spouse is responsible for it. The IRS will consider each situation on its own merits when determining which type of relief should be granted.
Who Qualifies for Innocent Spouse Relief?
To qualify for Innocent Spouse Relief, the spouses must have filed a joint tax return and the understatement of tax must be attributable to one spouse.
The spouse who is applying for innocent spouse relief must also show that at the time of signing the joint return, he or she did not know or had no reason to know about the understatement of tax.
Additionally, it must be shown that under the facts and circumstances it would be unfair to hold them liable for the tax debt.
To determine if an individual qualifies for relief, they must file Form 8857 with the IRS which takes into account all relevant facts and circumstances.
What is Form 8857 and How To Complete It?
Form 8857 is a form used by taxpayers to request innocent spouse relief from the Internal Revenue Service (IRS). Innocent spouse relief allows a taxpayer to be relieved of responsibility for any taxes, penalties, and interest that resulted from an incorrect joint tax return filed with their current or former spouse.
The form is used to provide information on the individual’s income, assets, liabilities, and other relevant financial information so that the IRS can determine if they qualify for innocent spouse relief.
When completing Form 8857, taxpayers must provide detailed information about their marriage and finances related to the joint tax return in question.
The completed form should be sent directly to the IRS office handling their case. By filing Form 8857, taxpayers are requesting additional time to pay back taxes they owe or asking that they no longer owe these taxes at all.
How do I File For Innocent Spouse Relief With The IRS?
If you think you qualify for innocent spouse relief from the IRS, you can file for relief. To do this, you need to fill out and submit Form 8857, Request for Innocent Spouse Relief.
In order to qualify for innocent spouse relief, you must meet certain conditions such as not knowing the tax return was incorrect or that the taxes owed had not been paid. You will also need to provide information on your spouse’s income and assets so that the IRS can collect the tax.
Once your request is reviewed and accepted, the IRS will remove some or all of your responsibility for paying the past due taxes.
It is important to note that if one spouse qualifies for innocent spouse relief, they are still both liable to pay any applicable penalties and interest charges on unpaid taxes.
What if The IRS Denies Innocent Spouse Relief?
If the IRS denies innocent spouse relief, then the taxpayer will be held liable for any taxes, penalties or interest that they are not responsible for.
This can be a difficult situation to navigate and it is important to understand all of your options.
The first step is to contact the IRS and ask them to reconsider their decision. If that does not work, then you may have to file an appeal with the Tax Court.
If you have never done this before, we highly recommend consulting with a tax professional who is knowledgeable in this area in order to ensure that all of your rights are protected throughout the process. This will ensure the highest chance of approval with the IRS.
How To Get Help With Innocent Spouse Relief?
If you are a married taxpayer who is facing tax liability for a joint return, and you believe that your spouse or former spouse should be solely responsible for the tax liability, you may qualify for Innocent Spouse Relief.
We recommend your first step should be to consult a tax professional who specializes in innocent spouse relief cases to determine whether you have grounds to qualify for relief.
National Tax Network has helped many clients apply for and receive innocent spouse relief. Give us a call at 877-860-3731 for a free 15 minute consultation. We will be able to tell you if you are a good candidate or if there is a better option available for your tax situation.
If you prefer to do it on your own, it is important to contact the Internal Revenue Service (IRS) as soon as possible. You can contact the IRS by phone, mail or online to request relief from joint and several liability for income taxes.
Additionally, assistance can also be found at the Taxpayer Advocate Service (TAS). They provide free assistance to taxpayers who are having difficulty resolving their tax issues with the IRS.