Innocent Spouse Relief Requirements for Qualification

innocent spouse reliefSection 6015 B of IRS Code

This type of relief can be seen as the “classic” innocent spouse relief. This is the first of three different ways to get out of paying your spouse’s tax liability. This was the original and sole type of innocent spouse relief before equitable relief and relief by separation of liability were created. Under this type of relief you can still qualify even if you’re still married and living with the spouse whose fault it was for having taxes reported incorrectly. In order to qualify for this type of relief your spouse or former spouse generally needs to be responsible for the tax, penalties and interest that is due. You will not qualify for this form of relief if you are the cause of tax liability that was created.

Conditions to Qualify for Innocent Spouse Relief

  1. You must have filed a joint return for the year you are seeking relief from.
    • If there was no joint return filed, you will not qualify for innocent spouse relief. This type of relief is only available to those individuals that are are held liable for their spouse’s taxes.
  2. The joint return that was filed must contain an understatement of tax owed. The understatement of tax must be from erroneous items/item that relate to something your spouse or former spouse did.
    • An understatement of tax means that you should have owed more tax than the amount was actually shown on your return.
    • Erroneous items can be under reported income, improper deductions, misstatements of basis in property, over claims of exemptions and credits, arithmetical errors, improper property transfers or anything else that cause the tax return to be wrong.
  3. You did not know or didn’t have any reason to know about the erroneous items on the return at the time you signed.
    • You must be able to prove that you didn’t know and there was no reason why you would have known. If you knew of the erroneous item at the time you signed the joint return, both you and your spouse will remain jointly liable for the tax liability. The IRS will look at many facts and circumstances around this item. This is a very common reason for innocent spouse relief requests to be rejected. Some common things the IRS looks at are the amount of the erroneous item with comparison to other items on the return, the financial situation of you and your spouse/ex-spouse, educational background, business experience, participation in the activity that resulted in the error, if you asked questions about the error prior to signing or if the item in error seems to be a recurring pattern in comparison to prior years returns.
  4. Considering all factors surrounding your situation, it would be unfair to hold you liable for the tax amount that is due.
    • The IRS will look at all facts and circumstances available to them in order to make a determination if would be unfair to hold you liable for the understated tax liability. This part of the rule is up to significant interpretation of the IRS. Some factors the IRS will look at tare whether you received benefit from the understated tax, if your spouse left you or cheated on you, and whether you have been divorced or separated from your spouse.
  5. At the time you apply for this relief it must be within two years of the IRS’s first collection attempt of the amount owed for the years that you seek relief from.

If you meet all of the conditions above you have a strong possibility of receiving this type of relief. If you do qualify for this type of relief you would be relieved of the entire tax amount owed, including interest and penalties relating to the understatement of tax. If you meet the requirements of this, it is a good idea to see if you also meet the requirements of the other forms of relief before applying. It is best to prove you qualify for more than one type of relief when applying to receive the best outcome from the IRS. The same forms are used for applying for all three types of relief, so it should not be too much additional work.