Everything You Should Know About Innocent Spouse Relief

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Everything You Should Know About Innocent Spouse Relief

by | Jul 3, 2021 | Blog | 0 comments

Married taxpayers who file joint tax returns are jointly and legally responsible for any tax obligation or liability that results. Because filing errors can have a significant impact on married taxpayers who file jointly, the IRS offers Innocent Spouse Relief!

Innocent spouse relief is an IRS process that permits persons to avoid paying more tax, interest, and penalties if their spouse or ex-spouse failed to declare income, reported income erroneously, or claimed tax deductions or credits incorrectly. 

How To Qualify For Innocent Spouse Relief

All of the following conditions should meet to qualify for an Innocent Spouse Relief:

  • The taxpayer submitted a combined return that had an underestimate of tax due to errors reported by the other joint-filer.
  • The taxpayer demonstrated that when they signed the joint return, they were unaware and had no cause to suspect that there was a tax understatement.
  • The taxpayer must be able to demonstrate that they were unaware and could not have been expected to be aware that something was wrong with their tax reporting.
  • The taxpayer and their spouse (or ex-spouse) did not transfer property to one another in a dishonest or fraudulent scheme.

All four of the conditions stated above must be met in the taxpayer’s claim for Innocent Spouse Relief. To be accepted, the applicant must offer a solid case with appropriate evidence and proof.

Applying For Innocent Spouse Relief with the IRS

Fill out IRS Form 8857 to get started for innocent spouse relief. If you believe you may be eligible for innocent spouse relief, bear the following in mind:

  • The IRS will notify your spouse or ex-spouse that you have filed innocent spouse relief.
  • The IRS will seek payment from your husband or ex-spouse for the tax, interest, and penalties.
  • If you have previously paid a portion of the entire tax obligation, the IRS will only return the tax payments you made with your own money.
  • If any amount of the tax, interest, and penalties does not qualify for innocent spouse relief, you and your spouse are equally responsible for that portion of the bill.

Types of Innocent Spouse Relief

If you are not eligible for innocent spouse relief, you may have two additional options:

  • Separation of Liability Relief – The IRS splits the tax bill between you and your ex, and each of you pays your portion. To qualify for this relief, you must be divorced, officially separated, or widowed, and you must not have lived with the individual for the previous 12 months.
  • Equitable Relief – If you did not file a combined return but are liable for your spouse’s error because you live in a community property state where income is deemed shared, this may be an alternative. You may be eligible for this relief if your tax return was valid, but you did not pay the tax.

At Tax Expert For America, we can be your go-to partner when it comes to Innocent Spouse Relief! We also offer the following services:

For more in-depth information or talk to one of our tax experts, please don’t hesitate to contact us today!

Schedule your free consultation today!