What Are The Basic Rules for Innocent Spouse Equitable Relief
When you file a joint income tax return, the law makes both you and your spouse responsible for the entire tax liability, which is called joint and several liability. The IRS provides innocent spouses equitable relief if appropriate. Joint and several liability applies not only to the tax liability you show on the return but also to any additional tax liability the IRS determines to be due.
Moreover, that applies even if the additional tax is due to the income, deductions, or credits of your spouse or former spouse. You remain jointly and severally liable for taxes, and the IRS can still collect them from you, even if you later divorce and the divorce decree states that your former spouse will be solely responsible for the tax.
If you believe, taking into account all the facts and circumstances, only your spouse or former spouse should be held responsible for all or part of the tax, you should request relief from the tax liability, including related penalties and interest. To request relief, you must file Form 8857. The IRS will use the information you provide on the form, and any attachments you submit, to determine if you are eligible for relief. The IRS will contact you if additional information is needed.
Married people who did not file joint returns, but who lived in community property states may request relief from liability for tax attributable to an item of community income. Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. See Community Property Laws.
The IRS Will Contact your Spouse/Ex-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.
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. If you are requesting relief from joint and several liability on a joint return, the IRS must also inform him or her of its preliminary and final determinations regarding your requested relief.
To protect your privacy, the IRS will not disclose your personal information (such as your current name, address, phone number(s), or information about your employer, your income, or your assets). Any other information you provide that the IRS uses to make a determination about your request for relief from liability could be disclosed to the person you list on your relief form.
Types of Relief
Four types of relief are available. They are:
- Innocent spouse relief,
- Separation of liability relief,
- Equitable relief, and
- Relief from liability for tax attributable to an item of community income.
Equitable Relief
A requesting spouse must satisfy all of the following threshold conditions to be eligible to submit a request for equitable relief under section 6015(f). With the exception of conditions (1) and (2), a requesting spouse must satisfy all of the following threshold conditions to be eligible to submit a request for equitable relief under section 66(c). The Service may relieve a requesting spouse who satisfies all the applicable threshold conditions set forth below of all or part of the income tax liability under section 66(c) or section 6015(f) if, taking into account all the facts and circumstances, the Service determines that it would be inequitable to hold the requesting spouse liable for the income tax liability. The threshold conditions are as follows:
(1) The requesting spouse filed a joint return for the taxable year for which he or she seeks relief.
(2) Relief is not available to the requesting spouse under section 6015(b) or (c).
(3) The claim for relief is timely filed.
Streamlined IRS Determination
If a requesting spouse who filed a joint return, or a requesting spouse who did not file a joint return in a community property state, satisfies the threshold conditions of section 4.01, the Service will consider whether the requesting spouse is entitled to a streamlined determination of equitable relief under section 66(c) or section 6015(f) under this section 4.02. If a requesting spouse is not entitled to a streamlined determination because the requesting spouse does not satisfy all the elements in this section 4.02, the requesting spouse is still entitled to be considered for relief under the equitable factors in section 4.03. The Service will make streamlined determinations granting equitable relief under section 66(c) or section 6015(f), in cases in which the requesting spouse establishes that the requesting spouse:
(1) Marital status. Is no longer married to the nonrequesting spouse as set forth in section 4.03(2)(a);
(2) Economic hardship. Would suffer economic hardship if relief were not granted as set forth in section 4.03(2)(b); and
(3) Knowledge or reason to know.
If you have reason to believe that you may qualify for an innocent spouse relief, contact Disparte Tax Law to discuss your particular circumstances.
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