Publication 971 - Instructions Innocent Spouse Relief Forms

Questions & Answers

This section answers questions com-

monly asked by taxpayers about inno-

cent spouse relief.

What is joint and several liability?

be unfair to hold you liable for

What are the rules for separation of

liability?

the understatement of tax.

•

You must request relief within 2

Many married taxpayers choose to

Under this type of relief, you allocate

years after the date on which the

file a joint tax return because of certain

(separate) the understatement of tax

IRS first began collection activity

benefits this filing status allows. Both

(plus interest and penalties) on your

against you after July 22, 1998.

taxpayers are jointly and individually

joint return between you and your

responsible for the tax and any interest

spouse. The understatement of tax al-

or penalty due on the joint return even

located to you is generally the amount

What are “erroneous items”?

if they later divorce. This is true even if

you are responsible for. To qualify for

separation of liability, you must have

a divorce decree states that a former

Erroneous items are any deduc-

filed a joint return and meet either of

spouse will be responsible for any

tions, credits, or bases that are incor-

the following requirements at the time

amounts due on previously filed joint

rectly stated on the return, and any

you file Form 8857.

returns. One spouse may be held re-

income that is not properly reported on

•

sponsible for all the tax due.

You are no longer married to, or

the return.

are legally separated from, the

How can I get relief from joint and

spouse with whom you filed the

What is an “understatement of

several liability?

joint return for which you are re-

tax”?

questing relief. (Under this rule,

Relief falls into three categories: “inno-

you are no longer married if you

An understatement of tax is generally

cent spouse relief,” “separation of lia-

are widowed.)

the difference between the total

bility,” and “equitable relief.” Each of

•

amount of tax that should have been

You were not a member of the

these types of relief have different re-

shown on your return and the amount

same household as the spouse

quirements. They are explained sepa-

of tax that was actually shown on your

with whom you filed the joint re-

rately below.

return. For example, you reported total

turn at any time during the

tax on your 2001 return of $2,500. IRS

12-month period ending on the

What are the rules for innocent

determined in an audit of your 2001

date you file Form 8857.

spouse relief?

return that the total tax should be

$3,000. You have a $500 understate-

Why would a request for separation

To qualify for innocent spouse relief,

ment of tax.

of liability be denied?

you must meet all of the following con-

ditions.

Will I qualify for innocent spouse

•

relief in any situation where there is

Even if you meet the requirements

You must have filed a joint return

an understatement of tax?

listed earlier, a request for separation

which has an understatement of

of liability will not be granted in the

tax.

No. There are many situations in

following situations.

•

The understatement of tax must

which you may owe tax that is related

•

The IRS proves that you and

be due to erroneous items of

to your spouse, but not be eligible for

your spouse transferred assets

your spouse (or former spouse).

innocent spouse relief. For example,

to one another as part of a fraud-

•

you and your spouse file a joint return

You must establish that at the

ulent scheme.

on which you report $10,000 of income

time you signed the joint return,

•

and deductions, but you knew that

The IRS proves that at the time

you did not know, and had no

your spouse was not reporting $5,000

you signed your joint return, you

reason to know, that there was

of dividends. You are not eligible for

had actual knowledge of any er-

an understatement of tax.

innocent spouse relief because you

roneous items giving rise to the

•

Taking into account all of the

have knowledge of the understate-

deficiency that are allocable to

facts and circumstances, it would

ment.

your spouse.

Page 18

Publication 971 - Instructions Innocent Spouse Relief Forms - 2003 Page 18

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