Innocent Spouse Relief
When you file a joint return, both spouses are generally responsible for all the tax on it, even after a divorce. So if the IRS is billing you for tax that your spouse or former spouse under-reported or didn’t pay, it can feel deeply unfair. We understand that. You may be able to ask the IRS to relieve you of some or all of it, by filing Form 8857, Request for Innocent Spouse Relief.
There are three types of relief, and which one fits depends on what went wrong on the return, what you knew at the time, and your situation today. A fourth applies only to people in community property states.
Innocent spouse relief
This relief covers additional tax caused by your spouse’s errors on a joint return, such as income they left off or deductions they shouldn’t have claimed. To qualify, you generally need to show all of the following:
- You filed a joint return that understated the tax.
- The understatement was due to erroneous items of your spouse or former spouse.
- When you signed the return, you didn’t know and had no reason to know about the understatement.
- Taking all the facts into account, it would be unfair to hold you liable for it.
Separation of liability relief
If you’re divorced, legally separated, widowed, or haven’t lived in the same household as your spouse for the 12 months before you file, you can ask the IRS to divide the understated tax between you. Each of you is then responsible only for the part allocated to you. Your knowledge of the item still matters here, but it’s applied differently.
Equitable relief
Equitable relief is the broadest of the three, and it’s the only one that covers tax that was correctly reported on the return but not paid. It’s also the fallback when you don’t qualify for the other two. The IRS weighs all the facts, including your current financial situation, whether you’d suffer economic hardship, whether there was abuse in the marriage, and who benefited from the unpaid tax. Our post on the three types of IRS innocent spouse relief compares them side by side.
The deadlines for each
Timing is where many requests go wrong. For innocent spouse relief and separation of liability relief, you generally have to file Form 8857 within two years after the IRS first began collection activity against you, such as taking a refund to pay the joint balance or sending a levy notice. Equitable relief has a longer window, generally tied to the period the IRS has to collect the tax or the period for claiming a refund. Read how long you have to file for innocent spouse relief before you assume a deadline has passed.
How the IRS decides a request
You file Form 8857 with an explanation of what happened and the documents that support it. By law, the IRS has to tell your spouse or former spouse about the request and let them participate, with no exceptions, even where there’s been abuse. What the IRS won’t share is your current name, address, phone number, employer, income or assets. The IRS reviews both sides and sends a preliminary determination. If you disagree with it, you can appeal and, in many cases, ask the Tax Court to review it.
How long it takes
The IRS says its review can take up to six months or longer. While your request is pending, the IRS generally can’t levy to collect the amounts it covers, though interest continues to accrue.
Innocent spouse vs injured spouse
These two are often confused. Innocent spouse relief is about tax you’re being held responsible for. Injured spouse relief, requested on Form 8379, is about a joint refund that was taken to pay your spouse’s separate past-due debts, such as back child support or a federal student loan. Innocent spouse vs. injured spouse relief explains which applies to you.
How we help with innocent spouse relief
We start by pulling the IRS transcripts for every joint year involved, so we know exactly which items and balances are at issue and which type of relief fits each one. Then we prepare Form 8857 with a clear account of what you knew and when, backed by the documents that support it, and we handle the IRS’s follow-up questions and any appeal.
Questions people ask about innocent spouse relief
How hard is it to get innocent spouse relief?
It depends on the facts. Requests are strongest when the erroneous items clearly belonged to the other spouse, you had no reasonable way to know about them, and the documents back that up. A well-documented request makes a real difference.
Which taxpayer is most likely to qualify?
Someone who wasn’t involved in the household finances or the spouse’s business, didn’t benefit from the unreported income, and is now divorced or separated tends to have the strongest case. That’s a pattern, not a rule, and each request is decided on its own facts.
Is there a time limit for innocent spouse relief?
Yes. For innocent spouse and separation of liability relief, it’s generally two years from the IRS’s first collection activity against you. Equitable relief has a longer window. See the deadlines section above.
How long does it take for innocent spouse relief to be approved?
The IRS says its review can take up to six months or longer, and an appeal adds time. The IRS generally can’t levy to collect the amounts in your request while it’s being decided.
If you’re being held responsible for a spouse’s or former spouse’s tax, call Fine & Clear Tax Solutions at 516-209-2594 or request a free consultation.