IRS Innocent Spouse Relief Rules

This article discusses the IRS innocent spouse relief rules. When couples file jointly, the law makes both parties responsible for the entire tax liability. Under tax law, this is called joint and several liability,[1] which is defined as two or more persons who share responsibility with respect to the same liability (i.e., event or act).

With this in mind, the IRS innocent spouse relief rules include both the time to file and reference collection activities. Taxpayers must file Form 8857, Request for Innocent Spouse Relief, no later than two years after the date the IRS first attempts to collect the debt. In other words, you must file Form 8857 as soon as you become aware of a tax liability “for which you believe only your spouse or former spouse should be held responsible” (IRS.gov, “Instructions for Form 8857,” 8/28/2013). The IRS determines two ways in which you become aware of the tax liability. The list is not exhaustive.

The first of the IRS innocent spouse relief rules governing tax liability awareness is determined by the IRS “examining your return and proposing to increase your tax liability” and the second way is the IRS sending you a notice (“Instructions for Form 8857”). Although these two determinations are standard, the IRS still gives you two years by which to file the form.

Keep in mind that under the IRS innocent spouse relief rules, collection activities may also initiate the two-year period. The following four types of collection activities are standard with regard to provisions under Innocent Spouse Relief.

• The IRS may inform you of the right to file Form 8857. As one option with regard to collection activity, the IRS may offset your income tax refund against an amount owed for a previous tax year.

• The IRS can file a claim on your behalf in a court proceeding in which you are a party. The IRS can file a claim involving your property. Filing of a claim includes the filing of proof with respect to bankruptcy proceedings.

• The United States can file a suit against you to collect the joint liability.

• The IRS may issue a notice, notifying you of the agency’s intent to levy and your right to a collection due process (CDP) hearing. The IRS will issue the notice based upon section 6330[2] guidelines.

Additional collection-related notices may include Letter 11, Final Notice of Intent to Levy and Letter 1058, Notice of Intent to Levy.[3]

In all cases, the IRS is required to contact your spouse with regard to your claim. “There are no exceptions, even for victims of spousal or domestic violence. [The IRS] will inform your spouse or former spouse that you filed Form 8857 and will allow him or her to participate in the process” (“Publication 971”). The IRS will also inform your spouse if you are requesting relief from joint and several liability on a joint return (“Publication 971”). This includes informing your spouse about preliminary and final determinations regarding your request for relief (“Publication 971”).

How Do I File an Application Under the IRS Innocent Spouse Relief Rules?

To request consideration for Innocent Spouse Relief, taxpayers must file Form 8857, Request for Innocent Spouse Relief. The form is applicable to a two-year time period. If you are requesting relief for more than two years, you will be required to file an additional Form 8857.

You must file Form 8857 as soon as you become aware of the tax liability you believe only your spouse or former spouse is liable. Methods that determine awareness include the fact that the IRS is examining your return and proposing to increase your tax liability; and the IRS sending you a notice indicating the understated tax liability.