Innocent Spouse Relief: Understanding the Requirements

Innocent Spouse Relief: Understanding the Requirements

A joint tax filing return makes both parties responsible for the tax bill. It removes the need to foot additional tax debt with an innocent spouse relief if your partner or ex-partner made a substantial error on the tax return. 

This article explains how innocent spouse relief works and how one can qualify for it.

What is Innocent spouse relief?

Innocent spouse relief is a procedure from Uncle Sam that excludes people from paying extra tax, penalties or interest when a partner or ex-partner reported incorrect income, claimed tax credit or deductions or didn’t report the income right.


Qualification for Innocent Spouse Relief

There is no automatic ticket to innocent spouse relief. The process might be as long as six month, and Uncle Sam can deny one's request. We have five essential rules to follow to qualify for innocent spouse relief:

  1. The tax filing must be joint.

  2. The other party must be responsible for the error

  3. You need to prove your innocence

  4. The circumstances need to be compelling

  5. As a general rule, one must request innocent spouse relief within two years after Uncle Sam started attempting to obtain the tax. There are some exceptions to this, though. 

You must file a joint tax return to qualify for innocent spouse relief. Should any income be missing from the tax return, it should be from your partner, not you. Also, you need to prove that on signing the tax return, you had no idea and had no business knowing that your tax liability was being understated.

The nature of the error, your financial situation, your educational status, and your involvement in the activity that triggered the issue determines the approach Uncle Sam takes. Also, in deciding whether to grant innocent spouse relief, Uncle Sam considers fairness. In other words, Uncle Sam will determine if the tax error benefited you, not minding that your spouse already left you.


Filing for Innocent Spouse Relief with Uncle Sam 

You need form 8857 to request innocent spouse relief. Uncle Sam will determine the tax you are liable for. Here are a couple of things to bear in mind if you believe you qualify for innocent spouse relief:

  • Uncle Sam has to inform your partner or ex-partner that you filed for innocent spouse relief. With this, your partner will also have to provide more info concerning your claim. One can contact the National Domestic Violence Hotline via 800-799-7233 for people that are being harassed.

  • Uncle Sam will collect all penalties and tax interest from your spouse or ex-partner. 

  • Uncle Sam will refund the tax payment made with your own money for people who already took care of some or all of their tax bills.

  • If any portion of the interest, tax or penalties does not merit innocent spouse relief, both parties are liable for the part of the bill.

  • There are some taxes that do not qualify for innocent spouse relief, like some employment taxes, shared responsibility payments, etc.


Types of Innocent Spouse Relief 

For people that do not qualify for innocent spouse relief, there are two other options:

  1. Separation of liability Relief: Uncle Sam will share your tax bill between your ex and you, in which everyone pays their share. You must be legally separated, divorced or widowed to qualify, and you must not have lived with the person for a year before the request.

  2. Equitable Relief: This is for people who didn't file a joint relief, but are affected due to a partner's error because of their residence in a community property state where income is shared. Community property states are California, Arizona, Nevada, New Mexico, Wisconsin, Texas, Washington, Idaho, and Louisiana. On the other hand, one might get relief if the tax wasn't paid, but the tax return was correct. 



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