Sam Brotman, JD, LLM, MBA December 16, 2013 5 min read

IRS Innocent Spouse Relief Requirements

IRS Innocent Spouse Relief Requirements - What is Innocent Spouse Relief?

You and your spouse are jointly responsible for paying federal tax due, interest accrued, and any applicable penalties under the IRS innocent spouse relief requirements. This is especially true if you and your spouse filed a joint return. However, if you believe that your current or former spouse should be solely responsible for a particular item or the underpayment of tax on the joint tax return, then you may be eligible for Innocent Spouse Relief.

Innocent Spouse Relief is defined as an option for a spouse that filed a joint return with another spouse where the “joint return has an understatement of tax (deficiency) that is solely attributable to your spouse’s erroneous item. An ‘erroneous item’ includes income received by your spouse but which was omitted from the joint return. Deductions, credits, and property basis are also erroneous items if they are incorrectly reported on the joint return” (IRS.gov, “Topic 205 – Innocent Spouse Relief,” 8/26/2013).

To qualify for Innocent Spouse Relief under the IRS innocent spouse relief requirements, you must provide evidence that when you signed the joint return you were not aware of the understatement of tax and that “taking into account all the facts and circumstances, it would be unfair to hold you liable for the understatement” (“Topic 205”). Eligibility for Innocent Spouse Relief under the IRS innocent spouse relief requirements could change the amount you owe and in some cases you may be eligible for a refund. Filers must submit Form 8857, Request for Innocent Spouse Relief to be considered; taxpayers must file the form no later than two years from the date of first attempt to collect the outstanding debt.

IRS Innocent Spouse Relief Requirements - Who Qualifies for Innocent Spouse Relief?

Taxpayers that have filed a joint return may qualify for Innocent Spouse Relief if they meet all three conditions as outlined in Publication 971, Innocent Spouse Relief.[1] The three most central conditions are as follows:

  • The taxpayers had to file a joint return.
  • One of the taxpayers believes that the understatement of tax is due to an erroneous item later found out by one of the spouses.
  • Evidence that proves that one spouse did not know about the erroneous item or that the understated tax existed.
  • Belief that taking into account all facts and circumstances, one spouse believes he or she should not be held responsible for the understated tax.

Within this context, understated tax refers to the determination of the IRS “that your total tax should be more than the amount that was actually shown on your return” (IRS.gov, “Publication 971,” 8/26/2013). Publication 971 defines erroneous items as those consisting of unreported income, which is defined as any amount received by a spouse that is not reported. Erroneous items also include incorrect deduction, credit, or basis, which is defined as “any improper deduction, credit, or property basis claimed by your spouse (or former spouse)” (“Publication 971”).

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[1] The link to Publication 971 is available here: http://www.irs.gov/pub/irs-pdf/p971.pdf.

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Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law

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