Instructions For Form 8857 (Rev. June 2007) (Page 2 of 4) in pdf

relate to making a determination about your request for relief

Underpaid tax. An underpaid tax is tax that is properly shown

from liability.

on your return but has not been paid.

If you petition the Tax Court (explained on page 3), your

Example. You and your former spouse filed a joint return

spouse or former spouse may see your personal

that properly reflects your income and deductions but showed

information.

an unpaid balance due of $5,000. The underpaid tax is $5,000.

CAUTION

You gave your former spouse $2,500 and he or she promised

to pay the full $5,000, but paid nothing. There is still an

Types of Relief

underpaid tax of $5,000, for which you and your former spouse

Four types of relief are available. They are:

are both liable.

1. Innocent spouse relief.

Additional information. For additional information on

2. Separation of liability relief.

equitable relief, see Pub. 971 and Rev. Proc. 2003-61. You can

3. Equitable relief.

find Rev. Proc. 2003-61 on page 296 of Internal Revenue

4. Relief from liability arising from community property law.

Bulletin 2003-32 at

(See Community Property Laws later).

Community Property Laws

Innocent Spouse Relief

Generally, you must follow community property laws when filing

You may be allowed innocent spouse relief only if all of the

a tax return if you are married and live in a community property

following apply.

•

state. Community property states are: Arizona, California,

You filed a joint return for the year(s) entered on line 1.

•

Idaho, Louisiana, Nevada, New Mexico, Texas, Washington,

There is an understated tax on the return(s) that is due to

and Wisconsin. Generally, community property laws provide

erroneous items (defined below) of the person with whom you

that you and your spouse are both entitled to one-half of your

filed the joint return.

•

total community income and expenses. If you and your spouse

You can show that when you signed the return(s) you did not

filed a joint return in a community property state, you are both

know and had no reason to know that the understated tax

jointly and severally liable for the total liability on the return. If

existed (or the extent to which the understated tax existed).

•

you request relief from joint and several liability, state

Taking into account all the facts and circumstances, it would

community property laws are not taken into account in

be unfair to hold you liable for the understated tax.

determining whether an item belongs to you or your spouse or

Understated tax. You have an understated tax if the IRS

former spouse.

determined that your total tax should be more than the amount

If you were a married resident of a community property state,

actually shown on the return.

but did not file a joint return and are now liable for an underpaid

Example. You and your former spouse filed a joint return

or understated tax, check “Yes” on line 5; you have the

showing $5,000 of tax, which was fully paid. The IRS later

following two ways to get relief.

examines the return and finds $10,000 of income that your

1. Relief from liability arising from community property law.

former spouse earned but did not report. With the additional

You are not responsible for the tax related to an item of

income, the total tax becomes $6,500. The understated tax is

community income if all of the following conditions exist.

$1,500, for which you and your former spouse are both liable.

•

You did not file a joint return for the tax year.

Erroneous items. Any income, deduction, credit, or basis is

•

You did not include the item in gross income on your

an erroneous item if it is omitted from or incorrectly reported on

separate return.

the joint return.

•

Under section 879(a), the item was income that belonged to

Partial innocent spouse relief. If you knew about any of the

your spouse or former spouse. For details, see Community

erroneous items, but not the full extent of the item(s), you may

Property Laws in Pub. 971.

•

be allowed relief for the part of the understatement you did not

You establish that you did not know of, and had no reason to

know about.

know of, that item.

•

Under all facts and circumstances, it would not be fair to

Additional information. For additional information on

include the item in your gross income.

innocent spouse relief, see Pub. 971.

If you meet the above conditions, complete this form.

Separation of Liability Relief

You must file Form 8857 no later than 6 months before the

You may be allowed separation of liability relief for any

expiration of the period of limitations on assessment (including

understated tax (defined above) shown on the joint return(s) if

extensions) against your spouse or former spouse for the tax

the person with whom you filed the joint return is deceased or

year for which you are requesting relief. However, if the IRS

you and that person:

•

begins an examination of your return during that 6-month

Are now divorced,

•

period, the latest time for requesting relief is 30 days after the

Are now legally separated, or

•

examination begins. The period of limitations on assessment is

Have lived apart at all times during the 12-month period prior

the amount of time, generally 3 years, that IRS has from the

to the date you file Form 8857.

date you filed the return to assess taxes that you owe.

See Pub. 504, Divorced or Separated Individuals, for details

2. Equitable relief. If you do not qualify for the relief described

on divorce and separation.

above and are now liable for an underpaid or understated tax

Exception. If, at the time you signed the joint return, you

you believe should be paid only by your spouse or former

knew about any item that resulted in part or all of the

spouse, you may request equitable relief. See Equitable Relief

understated tax, then your request will not apply to that part of

on this page.

the understated tax.

Additional information. For additional information on

What Happens After You File Form 8857

separation of liability relief, see Pub. 971.

We will review your form for completeness and contact your

Equitable Relief

spouse or former spouse to ask if he or she wants to participate

in the process. Generally, once we have all of the necessary

You may be allowed equitable relief if both of the following

information to make a decision, we will send a preliminary

conditions are met.

•

determination letter to you and your spouse or former spouse. If

You have an understated tax (defined earlier) or underpaid

neither of you appeals the decision, we will issue a final

tax (defined next), and

•

determination letter to both of you.

Taking into account all the facts and circumstances, the IRS

determines it would be unfair to hold you liable for the

Note. If you did not file a joint return for the year you are

understated or underpaid tax.

requesting relief, we will send the determination letters only to

you.

Equitable relief is the only type of relief available for an

underpaid tax.

-2-

Instructions For Form 8857 (Rev. June 2007) Page 2

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