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Innocent Spouse Relief From Joint Tax Liability

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Am I Liable for My Spouse's Taxes?

Married taxpayers who file joint returns are jointly and severally liable for any tax deficiencies, interests, and penalties from their joint returns even if the deficiencies are attributable to income from one of the spouses only. The tax law does provide an exception called "innocent spouse relief" to alleviate certain inequitable outcome that may arise from the joint and several liability rule.

What Is Innocent Spouse Relief?

When the innocent spouse meets certain legal requirements, he or she maybe able to avoid liability for back taxes, interests, and penalties that are attributed to the other spouse in a joint return. In order to qualify for this relief, the spouse must be able to prove all of the following:

  1. There was an understatement of tax on the joint return that was filed;
  2. The understatement was attributable to an erroneous item of the other spouse;
  3. At the time of signing the return, the innocent spouse did not actually know and had no reason to know that there was an understatement; and
  4. It would be unfair to hold the innocent spouse jointly and severally liable under the facts and circumstances.

In addition, the innocent spouse must request this relief by filing Form 8857 no later than 2 years after the IRS has commenced collection activities.

Does the Innocent Spouse Relief Apply to Married Taxpayers Filing Separate Returns?

No, the innocent spouse relief does not apply to situations where the married taxpayers filed separate returns or no returns because there generally is no liability. Complications arise when married taxpayers in community property states file separate returns. In such a case, a spouse may still be liable for his or her share of the other spouse's earned income and the associated tax liability even though separate returns were filed.

What Does "Have Reason to Know" Mean?

"Have reason to know" for the purposes of the innocent spouse relief generally means that an ordinary prudent person would know that there was an error or omission under the circumstances.

Do I Need an Attorney to Help Me with My Tax Problems?

Tax laws are complex and ever-changing. Although there are various tax preparation softwares on the market that may help you with your tax problems, they cannot provide the same level of service that a tax attorney can. If you are unsure about qualifying as an innocent spouse or you need someone to represent you before the IRS, a tax attorney can help you.

Photo of page author Kristen Johnson

, LegalMatch Legal Writer

Last Modified: 10-16-2014 11:28 AM PDT

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