Innocent Spouse Tax Relief
When a married couple files a joint tax return, both individuals are equally responsible for all taxes owed if there is a balance of taxes due. This is also called joint and several tax liability, as a married filing jointly couple is liable for taxes even if the additional taxes are the result of taxable income, tax deductions, or tax credits of a spouse or former spouse.
Quick instructions: How to file for innocent spouse relief.
If you believe that only your spouse or former spouse should be held responsible for part or all of the taxes due on your latest return, then you should request relief from the liability when you eFileIT on eFile.com by filing Form 8857. This includes tax penalties and interest, plus other tax debts. This might also be the case even if a divorce decree states that a former spouse will be responsible for any amounts due on previously filed joint returns. Here is how you DoIT on eFile.com: IT is Income Taxes!
How to Claim Innocent Spouse Relief
Form 8857 should be filed with your return on eFile.com as soon as possible to eliminate any inaccurate dues in the form of tax liability that should belong to the other spouse. The IRS may send you a notice or propose an increase to your tax liability, to which you should file the form. You can claim innocent spouse relief via form 8857 when you file your taxes online or complete it separately and mail it in.
When you prepare your taxes with eFile.com, the app will help you select and complete the form. See IRS Publication 971, Innocent Spouse Relief to find which documents, if any, need to be submitted with the form. If you mail the form in later, see IRS fax numbers and mailing addresses.
In comparison, the Injured Spouse Claim is an application for the allocation of a tax refund. Innocent spouse relief is for when your joint return results in a tax liability, while injured spouse is for when your refund is offset or garnished for your spouse's debt at no fault of your own.
- An injured spouse is defined as a taxpayer whose refund share part of a married joint tax return, that was or will be applied against past due federal and/or state taxes, spousal or child support, or student loans owed by the other of the two spouses. In other words spouse A would give up part of the tax refund to pay for past due debt incurred by spouse B.
- If you are approved as an injured spouse, you might recoup all or part of your share of the tax refund from the joint tax return.
The easiest way to file as an innocent or injured spouse is to start and e-file a tax return on eFile.com. The eFile app will prepare the forms you need to claim Innocent Spouse Relief.
Types of Tax Relief
Saving money or claiming relief on your taxes comes in many forms. The table below focuses on claiming various programs for spousal debts and other complications with filing a married jointly or married separate return when one of you owes some type of debt.
Innocent Spouse Relief
What if your spouse or ex-spouse lied about their income or underpaid taxes without your knowledge on a past joint tax return and now you are being held responsible for someone else's tax debt? In that case, you can apply for Innocent Spouse Relief. If you qualify for Innocent Spouse Relief, you will not be responsible for your spouse or ex-spouse's unpaid taxes. When you signed the joint return, you did not know (and had no reason to know) that the return was incorrect.
All of the following conditions are required to qualify for innocent spouse relief:
- A married filing joint tax return that has an incorrect tax amount which is solely attributable to your spouse's erroneous tax items, such as income received by your spouse but not reported on the joint tax return. Tax deductions, tax credits, and property basis are also erroneous items if they're incorrectly reported on the joint return.
- You must prove that, at the time you signed the joint return, you didn't know, and had no reason to know, that incorrect statements were entered on the tax return.
- You must show that, taking into account all the facts and circumstances, it would be unfair to hold you liable for the understatement of tax liability.
The IRS will ask you to notify the spouse you filed the married filing joint return(s) with of your relief request and allow that spouse to provide information for consideration regarding your claim.
The application for innocent spouse relief must completed via Form 8857 no later than 2 years after the date the IRS first attempted to collect the taxes in question from you.
Separation of Liability Relief
Besides having filed a married filing joint tax return, one of the following requirements must be met in order to qualify for separation of liability relief:
- You're legally separated or divorced from the spouse with whom you filed the married filing joint tax return.
- You're filing as widowed.
- You haven't been a member of the same household as the spouse with whom you filed the married filing joint tax return at any time during the 12-month period ending on the date you request relief.
Furthermore, you must show that you did not have actual knowledge of the item or issue that gave rise to the deficiency at the time you signed the joint return, unless you can prove you were asked to sign the joint tax return under duress.
In this case, the IRS will assign a certain amount of the tax liability to you and a certain amount to your ex-spouse. You will only be responsible for your portion of the tax debt along with a portion of the interest and tax penalties.
The IRS will ask you to notify the spouse you filed the married filing joint return(s) with of your relief request and allow that spouse to provide information for consideration regarding your claim.
The application for separation of liability relief must completed via Form 8857 no later than 2 years after the date the IRS first attempted to collect the taxes in question from you.
Equitable Relief
There are many circumstances which may disqualify you from classic Innocent Spouse Relief or the Separation of Liability Relief, but should not keep you from getting the tax relief you deserve.
- Examples include having had to file separately due to state community property laws and having had knowledge of your spouse's tax fraud—even if you were afraid to question your spouse about it due to fear of physical abuse. The IRS may grant you Equitable Relief in some of these situations.
- There is a long list of rules that guide the IRS on whether to grant Equitable Relief. Generally, you may qualify for it if you did not sign the fraudulent joint return with the intention of committing fraud, or if you signed it under duress (for example, if you were an abused spouse). If the IRS grants you Equitable Relief, you may not be held responsible for the unpaid taxes and you may even get a refund of some of what you have already paid. Under IRS guidelines, there is no time limit on claims of Innocent Spouse Equitable Relief. This means that if you did not request relief for an earlier year due to the old 2-year time limit on claims, you may now make a request. Also, if you did make a claim and it was rejected because of the time limit, you may now make a new request.
The IRS will take into account abuse and financial control by the non-requesting spouse in determining whether equitable relief is warranted. You might also be asked to notify the spouse you filed the married filing joint return(s) with of your relief request and allow that spouse to provide information for consideration regarding your claim.
If you lived in a community property state—Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin—and didn't file your tax return as married filing jointly, you might qualify for relief from the operation of state community property law. Read Publication 971, Innocent Spouse Relief, for more details on this; review applicable state tax information.
Regardless, you must file Form 8857, Request for Innocent Spouse Relief, if you believe you qualify for the relief. You can eFileIT with your return or mail it separately to one of the following addresses along with any additional documentation that may be requested.
Note: If you have already e-filed your return and you need to file Form 8857, you can go back into your account, prepare it in your eFile.com account, print it, and mail it to the IRS.
Where to Mail Form 8857
Send your completed Form 8857, Request for Innocent Spouse Relief, to one of the following addresses. The two addresses should be the only ones used if sending Form 8857 by itself.
If using the U.S. Postal Service:
Internal Revenue Service
P.O. Box 120053
Covington, KY 41012
For FedEx, UPS, or other private delivery service:
Internal Revenue Service
7940 Kentucky Drive, Stop 840F
Florence, KY 41042
You can also fax the form and attachments to the IRS at 855-233-8558. Do NOT mail or fax your Form 8857 to any other IRS address or fax number.
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