If you owe taxes because your spouse did not include income or claimed deductions that you are not entitled to on your joint tax return, you may be eligible for relief from the liability under the "innocent spouse relief" provisions of the Internal Revenue Code (IRC). Here’s a detailed explanation of the relevant provisions and procedures:
Types of Relief Available
- Innocent Spouse Relief (§ 6015(b)):
- Eligibility: You may be relieved of responsibility for paying tax, interest, and penalties if:
- A joint return was filed.
- There is an understatement of tax due to erroneous items of your spouse.
- You did not know, and had no reason to know, about the understatement when you signed the return.
- It would be inequitable to hold you liable for the understated tax, considering all the facts and circumstances.
- You elect the benefits of this subsection no later than two years after the IRS begins collection activities.
- Partial Relief: If you knew about some but not all of the erroneous items, you may be relieved of the portion of the understatement you did not know about.
- Separation of Liability Relief (§ 6015(c)):
- Eligibility: This relief is available if you are no longer married to, legally separated from, or not living with the spouse with whom you filed the joint return. The liability for any deficiency is allocated between you and your spouse as if you had filed separate returns.
- Conditions: You must elect this relief within two years after the IRS begins collection activities. You must also prove that you did not have actual knowledge of the erroneous items at the time you signed the return.
- Equitable Relief (§ 6015(f)):
- Eligibility: If you do not qualify for relief under § 6015(b) or (c), you may still be eligible for equitable relief if, considering all the facts and circumstances, it would be unfair to hold you liable for the unpaid tax or deficiency.
- Conditions: You must request this relief within the time period the IRS has to collect the tax (generally 10 years from the date the tax was assessed) or within the period for claiming a refund (generally three years from the date the return was filed or two years from the date the tax was paid, whichever is later).
Filing for Relief
- Form 8857: To request any of the above types of relief, you must file Form 8857, "Request for Innocent Spouse Relief." This form should be filed as soon as you become aware of a tax liability for which you believe only your spouse or former spouse should be held responsible.
Important Considerations
- Joint and Several Liability: When you file a joint return, both you and your spouse are jointly and severally liable for the entire tax liability. This means the IRS can collect the entire amount from either spouse.
- Notification to Spouse: By law, the IRS must notify your spouse or former spouse if you file Form 8857. However, the IRS will not disclose your personal information such as your current address or employer.
- Abuse and Financial Control: If you were a victim of abuse or your spouse had financial control, these factors will be considered in determining whether it is inequitable to hold you liable.
Example Scenarios
- Understated Tax: If your spouse did not report $10,000 of income, resulting in an additional $1,500 of tax, and you were unaware of this income, you may qualify for innocent spouse relief.
- Unpaid Tax: If you and your spouse filed a joint return showing a balance due of $5,000, and your spouse promised to pay but did not, you may qualify for equitable relief if it would be unfair to hold you liable for the unpaid tax.
Conclusion
If you find yourself owing taxes due to your spouse’s actions on a joint return, you should consider applying for innocent spouse relief, separation of liability relief, or equitable relief by filing Form 8857. Each type of relief has specific eligibility requirements and conditions, so it is important to review these carefully and provide all necessary documentation to support your claim.
Sources:
Instructions for Form 8857 (06/2021)
Publication 971 (12/2021)
§ 6015. Relief from joint and several liability on joint return
Rev. Proc. 2013-34
Publication 3865 (11/2022)
Publication 3498-A (05/2021)
