What to Know about IRS Innocent Spouse Relief

The best filing status for married taxpayers is the joint return. However, this is not always beneficial in every case especially if your partner is hiding information or has an intent to defraud the IRS. This is where the IRS innocent Spouse Relief comes in. With such a program, you can avoid being slammed with penalties or taxes you owe due to errors made by your partner.

Let’s explore the basics of this relief and how to know if you qualify.

What is Innocent Spouse Relief?

This is a provision from Uncle Sam with which people can avoid paying extra taxes, penalties and interest. If your partner, even an ex failed to report the right income, doctored the income or claimed the wrong tax deduction or credit, this provision will exclude you from the consequence.

Eligibility for Innocent Spouse Relief

There is no automatic ticket to an innocent spouse. IRS is under no legal obligation to grant the request and it can span up to six months.

  • Taxes must be Jointly Filed: Your qualification for innocent spouse relief hinges on your filing status – a joint return with either your partner or ex-spouse
  • You should have no former knowledge of the Mistake: Whatever income that is missing from your tax return should be received by your partner, not you.
  • Prove that you are not Guilty: You need to prove that even though you signed the return, you had no clue there was an error.
  • Your Request must be timely: this request needs to be within two years when Uncle Sam established the collection action.

How to file for Innocent Spouse Relief with the IRS

The first step to requesting an innocent spouse relief is to file Form 8857. On the contrary, you can write a seven-page detailed statement containing the same information. Uncle Sam will estimate the tax you are liable for.

There are some things you should keep in mind if you qualify for the innocent spouse relief:

  • Uncle Sam is mandated to tell either your partner or former partner that there is a request for innocent spouse relief. With this, your spouse will be allowed to submit relevant information regarding the claim. There is a provision for spouses that do not feel safe.
  • The interest, tax and penalties will be the responsibility of your ex or spouse
  • For people that made a payment already, Uncle Sam can refund the portions paid with your money.
  • In the case that any of the interest, taxes or penalties are not eligible for the innocent spouse relief, the liability will be spread between the couples.
  • Innocent tax relief cannot be applied to some type of taxes like some employment taxes and others.

What to do if you are not qualified

You can try some other options if you are not eligible for the innocent spouse relief. We discuss two alternatives:

  1. Separation of Liability Relief
    In this option, Uncle Sam divides the tax between both parties so that each of the partners pays what they owe. This alternative is recommended for couples that are legally divorced or separated. It is also recommended for people with a dead spouse. Whichever the case, one can only apply for the relief after a year of separation with the spouse
  2. Equitable Relief
    You are not qualified for the innocent spouse relief since you did not file a joint return with your partner. However, this is a good option if the responsibility of paying your partner’s tax error lies on you since you reside in a community property state in which income is classified as shared.

Get Help with USA Tax Settlement

If you believe you qualify for innocent spouse relief, working with professional increases your chances of success. With our team of professionals at USA Tax settlement, your chances of success increase significantly, get in touch with us today.

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