Innocent Spouse Relief: Guides, Types, Rules & Forms
When individuals file a joint tax return, each spouse is equally liable for all tax, penalties and interest that come about from that particular year. The IRS or states can legally go after both spouses or just one spouse for the entire tax amount that is due even if the couple is divorced and the divorce decree states that one individual is responsible for the taxes owed.
The IRS created innocent spouse relief because it realizes that there are times when it would be unfair to hold both joint filers equally liable for the tax liability that was created. There are three forms of spouse relief that will allow one spouse to get out of paying their spouse or ex-spouses tax. If an individual does not qualify for one, it is possible that they will qualify for another type of relief.
Innocent Spouse Relief (Original/Classic type of relief)
This was the original type of innocent spouse relief. This is an improved version from a prior innocent spouse law which has since been split into this section and two others. This form of relief can fully relieve one spouse’s responsibility for paying any of the understatement of taxes owed. Individuals must meet specific criteria in order to qualify.
Under this form of relief the understatement of tax is allocated between both spouses or ex-spouses as if returns were done separately. The amount is allocated based on the amount that each is responsible for.
If an individual does not qualify for the prior two types of relief, it is possible that they could qualify for equitable relief. Unlike the other types of relief, equitable relief allows individuals to apply if they have either an understated tax or underpaid tax. This relief was created to cover people that don’t qualify for first two types of relief but it would still be unfair to hold them liable for the tax amount owed.
Innocent spouse relief filing requirements. The IRS requires specific IRS forms and highly suggest including a letter explaining the situation in more detail to help them in their determination.
Questions and answers to commonly asked questions about innocent spouse relief, equitable relief, and separation of liability
Our Tax team will gather the appropriate tax records if you qualify for Innocent Spouse Relief. This will reduce your overall tax debt or liabilities helping you settle for less.