Form 8857: Request For Innocent Spouse Relief
Form 8857– "Request for Innocent Spouse Relief," is an official document used by the Internal Revenue Service (IRS) to request relief from tax liability for a joint tax return. This relief applies to situations where one spouse believes they are unfairly held responsible for tax mistakes or omissions made by their spouse (or former spouse) on a jointly filed tax return.
Who Can File Form 8857?
Not everyone who filed a joint return with tax issues qualifies for innocent spouse relief. Here are the general criteria:
Filed a Joint Return: You must have filed a joint tax return with the spouse or former spouse for the tax year(s) in question.
Understatement of Tax: There must be an "understatement of tax" on the return. This means the tax reported on the return is less than the actual tax owed.
Spouse Responsible: You believe your spouse (or former spouse) is responsible for the understatement. Common reasons include unreported income, inflated deductions, or fraudulent claims.
Innocence: You must demonstrate you were innocent of your spouse's actions. This means you didn't know about the understatement and couldn' have any reason to suspect it. Additionally, you must show it would be unfair to hold you liable for the entire tax burden.
Common Reasons for Filing Form 8857:
Spouse Underreported Income: Your spouse may have hidden income (wages, business income, etc.) from you and the IRS, resulting in an understatement of tax on the joint return.
Excessive Deductions/Credits Claimed by Spouse: Your spouse may have claimed inflated deductions or credits they weren't entitled to, leading to a lower reported tax liability.
Gambling Winnings or Losses Not Reported: Unreported gambling winnings or improperly claimed gambling losses can create an understatement of tax.
Spouse Mismanaged Business Finances: If you were not involved in your spouse's business, you may not be aware of any tax-related issues within the business.
How long do I have to file Form 8857?
There is no specific deadline for filing Form 8857, but it's best to file as soon as possible after becoming aware of the tax issue. Delays can negatively impact your chances of receiving relief.
What happens to my spouse if I file Form 8857?
Filing Form 8857 doesn't absolve your spouse of their tax liability. The IRS will pursue them for the remaining tax debt.
Can I still file Form 8857 if I'm divorced?
Yes, you can still file for innocent spouse relief even if you are divorced from your spouse.
What if I knew about the understatement but couldn't stop my spouse?
Unfortunately, knowledge of the underpayment generally disqualifies you from innocent spouse relief. However, you might still qualify for separation of liability if you can prove minimal involvement.
Does filing Form 8857 stop collection efforts?
No, filing the form doesn't automatically halt IRS collection activities. However, the IRS will typically put a hold on collections while they review your request.
What happens if my request for relief is denied?
You have the right to appeal the IRS decision. It's advisable to consult with a tax professional to navigate the appeals process.
What documents do I need to file with Form 8857?
There's no specific list, but documentation supporting your innocence is crucial. This might include financial statements, communication records with your spouse, and proof of your efforts to gather tax information.