Many married taxpayers choose to file a joint tax return because of certain benefits this filing status allows them. When filing jointly, both taxpayers are jointly and severally liable for the tax and any additions to tax, interest, or penalties that arise from the joint return even if they later divorce. Joint and several liability means that each taxpayer is legally responsible for the entire liability. Therefore, both spouses on a married filing jointly return are generally held responsible for all the tax due even if one spouse earned all the income or claimed improper deductions or credits. This is also true even if a divorce decree states that a former spouse will be responsible for any amounts due on previously filed joint returns. In some cases, however, a spouse can get relief from being jointly and severally liable.

Types of Relief

Most people generalize by referring to Innocent Spouse Relief as any type of relief from a jointly filed tax debt, however there are actually three types of relief:

1. Innocent Spouse Relief-provides you relief from additional tax you owe if your spouse or (former spouse) failed to report income, reported income improperly or claimed improper deductions or credits.
2. Separation of Liability Relief-provides for the separate allocation of additional tax owed between you and your former spouse or your current spouse you’re legally separated from or not living with, when an item wasn’t reported properly on a joint return. You’re then responsible for the amount of tax allocated to you.
3. Equitable Relief –may apply when you don’t qualify for innocent spouse relief or separation of liability relief for something not reported properly on a joint return and generally attributable to your spouse. You may also qualify for equitable relief if the amount of tax reported is correct on your joint return but the tax wasn’t paid with the return.

So now that you’ve determined which type of relief you are seeking, how do you go about it?

Innocent Spouse Relief

You must meet all 3 of the following conditions to qualify for innocent spouse relief:

• You filed a joint return that has an understatement of tax (deficiency) that’s solely attributable to your spouse’s incorrect item. An incorrect item includes income received by your spouse but not included on the joint return. Deductions, credits, and property basis can also be classified as erroneous items if they’re incorrectly reported on your joint return.
• You establish (provide proof) that at the time you signed the joint return you didn’t know, and had no reason to know, that there was an understatement of tax and
• Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understatement of tax.

My spouse forged my signature to a joint return. Am I eligible for innocent spouse relief?

You may be eligible for relief, but relief does not fall under the innocent spouse rules. If you can establish your signature was forged, and there was not tacit (implied) consent, the joint election is invalid and you will only be liable for your separate tax liability.

How Long Will it Take?

Request for Innocent Spouse Relief, is filed with the IRS, it may take up to 6 months before a determination is made. During the processing time, the Service is requesting your tax information and contacting the non-requesting spouse. By law, the IRS must contact your spouse or former spouse. There are no exceptions, even for victims of spousal abuse or domestic violence.

Note:  providing proof is oftentimes the most difficult aspect of getting innocent spouse relief.  We speak to people all the time that are very emotional for numerous reasons.  We try are very empathetic to each of your situations but need to stay focused and on track… without any proof of you claim, innocent spouse relief will unlikely get approved.

Separation of Liability Relief

Under this type of relief, you divide (separate) the understatement of tax (plus interest and penalties) on your joint return between you and your spouse. The understatement of tax allocated to you is generally the amount of income and deductions attributable to your earnings and assets.

To qualify for separation of liability relief, you must have filed a joint return and must meet one of the following requirements at the time you request relief:

• You’re divorced or legally separated from the spouse with whom you filed the joint return
• You’re widowed, or
• You haven’t been a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you request relief

If you had actual knowledge of the item that gave rise to the understatement of tax at the time you signed the joint return, you don’t qualify for separation of liability relief.

Equitable Relief

Equitable relief is only available if you meet all of the following conditions:

• You do not qualify for innocent spouse relief or the separation of liability election.
• 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.)

The following factors may be considered, but the list is not all-inclusive:

• Current marital status
• Reasonable belief of the requesting spouse, at the time he or she signed the return, that the tax was going to be paid; or in the case of an understatement, whether the requesting spouse had knowledge or reason to know of the understatement
• Current financial hardship/inability to pay basic living expenses
• Spouses’ legal obligation to pay the tax liability pursuant to a divorce decree or agreement to pay the liability
• To whom the liability is attributable
• Significant benefit received by the requesting spouse
• Mental or physical health of the requesting spouse on the date the requesting spouse signed the return or at the time the requesting spouse requested the relief
• Compliance with income tax laws following the taxable year or years to which the request for relief relates
• Abuse experienced during the marriage. 

Will the IRS deny me relief if I do not provide them with the information they request?

IRS will base their decision upon all the information available to them. If enough information is not available, it could adversely affect a request for relief.

For more information on Innocent Spouse Relief visit:  https://www.irs.gov