top of page
Search
  • Robert Nath

INNOCENT SPOUSE RELIEF AND DIVORCE

Updated: Mar 14, 2022


What relief is available under the innocent spouse revisions?

The 1998 revisions to this law provided for three types of relief:

(1) traditional innocent spouse relief,

(2) “separate liability election”, and

(3) equitable relief.

Each of these has its own standards. All are difficult to meet in the real world. You may ask for the traditional type of innocent spouse relief where the IRS proposes more taxes and you claim you did not know about the taxable activities, and other requirements are met.

You might qualify for “separate liability election” where you have separated or divorced, but now the IRS proposes additional taxes.

“Equitable relief” is for cases that don’t fit the first two, but where you show that it is unfair under “all the circumstances” to make you pay the tax bill.

You must use IRS Form 8857 to file for all three types of innocent spouse relief.

Can I get “innocent spouse” relief if I divorce but still owe taxes?

Sometimes. The first two types of innocent spouse relief require that the IRS has assessed new or more taxes on your joint return. So if you filed a joint return and simply failed to pay the taxes due on that return, you are not legally eligible for the first two types of innocent spouse relief.

The third type, “equitable relief,” is potentially available to you, but it requires a full, normally difficult demonstration that collection of the tax against you would be “inequitable” under all the circumstances. Generally, “inequitable” means “unfair.” In the real world, the IRS is reluctant to grant any such relief.

My ex signed papers stating he would pay our back taxes (on a joint return). Why can’t the IRS go after him/her?

The IRS will go after the easiest dollars first. If that means both of you, the IRS will do that. If only one is collectible, the IRS will seek that collection first. The property settlement agreement and/or the divorce decree do not bind the IRS, so the agency does not have to “obey” that decree or even pay attention to it (but see note below). Joint returns create “joint and several” liability, meaning both of you are liable together, and separately, for all the unpaid taxes attributable to that return.

Note, however, that if you must make payments to your ex under a divorce decree, the IRS usually honors those payments s “allowable” when it calculates how much of your income you can pay to IRS on an installment agreement or offer in compromise.

How do I apply for Innocent Spouse relief?

You must use Form 8857 and consult the instructions in detail. Also you can check Publications 971 and 3512, and the IRS’ short-hand for innocent spouse determinations, found at http://www.irs.gov/individuals/article/0,,id=96786,00.html. These sources will guide most of your questions and considerations on innocent spouse relief.

What happens to my ex if I apply and obtain innocent spouse relief?

First, when you apply, the IRS must notify your ex. The ex then has a legal right to “intervene.” That term means your ex gets to comment on your application (but limited to submitting information and documents).

Second, if the IRS grants your request, you are relieved from the joint liability, but your ex remains fully liable for any unpaid taxes, penalties and interest.

Before you file for innocent spouse, think through whether having your ex fully liable is in accord with your separation papers, or your life plans.

Can I be “innocent” if I signed a joint return and the IRS has not proposed more taxes?

Maybe. Under traditional innocent spouse rules, and the “separate liability election” rules, you are liable for all taxes shown on the joint tax return. Only additional taxes the IRS proposes are subject to these rules. However, you can still apply for relief by presenting evidence to the IRS that would show it is “inequitable” to have you pay the joint taxes. All three types of “innocent spouse” relief are requested on one form, Form 8857.


6 views0 comments

Recent Posts

See All

Comentarios


bottom of page