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What is innocent spouse relief?
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Last Updated
13th of April, 2010

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Most married couples take advantage of joint filing for the money-saving benefits. But along with the savings comes big disadvantages. When you file jointly, you’re held liable for your spouse’s tax blunders! This means if your spouse under-reports income, you get the blame, too! There are ways to remedy this, but the path to recovery is difficult.

The preliminary qualifying questions for Innocent Spouse Relief, which will remove your liability if your prove to the IRS that you did not know your spouse under-reported income:

There are two questions you must ask yourself before you apply for Innocent Spouse Relief.
  1.  Did you sign a balance-due tax return? If the answer is “Yes,” you will not qualify for Innocent Spouse Relief. The IRS will not make exceptions for this, because by signing the returns you were aware of the debt liability. 
  2. What year is the return from? If the tax return in question is more than two years old, you do not qualify for Innocent Spouse Relief.
Using these qualifiers to opt yourself out of the program early on will keep you from experiencing disappointing surprises down the line.

The second set of qualifying questions:

If the adjustment was made by the IRS, you can go on to the next set of qualifying questions. You must fit the following criteria to be accepted for Innocent Spouse Relief:

  1. You filed a joint return with an understatement of tax by your spouse
  2. You did not know there was an understatement of tax when they signed the tax return
  3. It would be unfair to hold you responsible
  4. You are requesting relief within two years after the date on which the IRS first began collection activity against you after July 22, 1998
The Alternative: Equitable Relief
When you submit a request for Innocent Spouse Relief and it’s denied, the IRS will automatically consider Equitable Relief. This is an alternative for those that do not qualify for Innocent Spouse Relief. However, Equitable Relief also adheres to a strict set of rules:
  • You do not qualify for innocent spouse relief
  • The IRS determines that it is unfair to hold you liable for the understatement of tax taking into account all the facts and circumstances.  
* Note: Unlike innocent spouse relief or separation of liability, if you qualify for equitable relief, you can get relief from an understatement of tax or an underpayment of tax. (An underpayment of tax is an amount properly shown on the return, but not paid.)

Spousal abuse comes into effect for Equitable Relief. In order to qualify on the basis on spousal abuse, the IRS needs a police report and divorce decree showing abuse.

Final Tips: The IRS does not usually allow Equitable or Innocent Spouse Relief. The IRS may send you forms for Equitable Relief or Innocent Spouse Relief, but this is no guarantee that you will qualify.
If you’re one of the rare few that does qualify, request Innocent Spouse Relief using Form 8857, “Request for Innocent Spouse Relief.”

If you would like additional information and assistance with your tax debt, you can get a free consultation to resolve delinquent taxes today!

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