5/27/2017

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Innocent Spouse Rules

Question: What are the Innocent Spouse Rules?

Answer: You are personally liable for any tax due on a joint return you have filed whether you are still married to the spouse with whom you filed the joint return or you have since divorced or separated.

If you are still married and living with the same spouse, the only way to avoid personal liability on a joint return is to qualify as an innocent spouse or to apply for equitable relief from the Internal Revenue Service (IRS).

If you are divorced, legally separated, living apart, or your spouse has died, you may either seek relief under the innocent spouse rules below or you may be able to elect separate liability treatment or seek equitable relief from the IRS.

You must satisfy all of the following conditions to qualify for innocent spouse relief:

  • The tax shown on the joint return was understated due to the omission of income by your spouse, or erroneous deductions or credits claimed by your spouse.
  • When signing the joint return, you did not know and had no reason to know that tax on the return was understated.
  • Taking all the circumstances into account, it would be inequitable to hold yo ui liable for the tax. In deciding the equity issue, the IRS and courts consider the extent to which you benefited from the tax underpayment, beyond receiving normal support. Thus it is possible to be held liable for a tax understatement that you did not know about or have reason to know about, on the grounds that you benefited from the underpayment in the form of a high standard of living. The IRS will also consider whether you later divorced or were deserted by your spouse.
  • You file an innocent spouse election with the IRS on Form 8857.

Innocent spouse relief applies to tax understatements; that is, where the amount of tax shown on a joint return is incorrect. If the proper amount of tax liability is shown on the return buy not paid, innocent spouse relief is not available. However, the IRS can provide equitable relief where innocent spouse relief is unavailable and it would be unfair to hold you liable.

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