When married taxpayers sign a joint tax return, they are jointly and legally responsible for all taxes due, even if one spouse incorrectly reported items or omitted items on the tax return.
In the event that a spouse reports improper items on the joint return on purpose, the IRS may exempt the innocent spouse from paying additional taxes, interest, and penalties, through Innocent Spouse Relief and other IRS relief programs we will see on this page.
Innocent Spouse Relief
Innocent spouse relief can exempt you from taxes, interest, and penalties if your spouse or former spouse failed to report income, misreported income, or claimed improper deductions or credits.
According to the IRS, you must meet the following conditions to qualify for innocent spouse relief:
- You filed a joint return that has a tax understatement due to erroneous items reported by your spouse or former spouse.
- You show that you did not know an incomplete tax return existed at the time you signed the joint return.
- Considering all the facts and circumstances, you determine that it would be unfair to hold you liable for underreporting.
- You and your spouse have not transferred property to each other as part of a fraudulent scheme.
If you meet all of these conditions, you can apply for this relief no later than 2 years from the date the IRS first tried to collect the taxes owed from you.
To apply for innocent spouse relief, you should submit to the IRS a completed Form 8857, Request for Innocent Spouse Relief. For more information, see Publication 971, Innocent Spouse Relief.
Separation of Liability Relief
This relief program is intended for legally separated taxpayers. Provides separate allocation of additional taxes due between you and your former spouse when an item is not correctly reported on a joint tax return. Therefore, you are responsible only for the amount of tax assigned to you.
To qualify for separation of liability relief, you must have filed a joint return and meet one of the following requirements:
- You are divorced or legally separated from the spouse with whom you filed the joint return
- You are a widow.
- You have lived apart from the spouse with whom you filed the joint return for at least 12 months.
- You must not have had actual knowledge of the item giving rise to the understatement at the time you signed the joint return, unless you can demonstrate that you signed the statement under duress.
If you meet the eligibility criteria, you can apply for separation of liability relief by filing IRS Form 8857.
Equitable Relief
If you do not qualify for Innocent Spouse Relief or Separation of Liability Relief, you may qualify for Equitable Relief.
In order to qualify for equitable relief, you must meet the following requirements:
- You must be able to show that under all the facts and circumstances, it would be unfair to hold you liable for the understatement of taxes.
- You must also meet the other requirements listed in Publication 971, Innocent Spouse Relief. For more information on how to qualify for equal relief, see Income Procedure 2013-34.
To apply for equitable relief, you should file Form 8857. Always consult with a tax professional before making any decisions. A qualified tax professional can help you determine if you meet the eligibility criteria for Innocent Spouse Relief, Separation of Liability Relief, or Equitable Relief and help you decide which option would be best for you.