Publication 971 - Instructions Innocent Spouse Relief Forms

the way your spouse handled gambling winnings. The

return for which you are requesting relief. (Under this

understatement of tax due to the $20,000 will qualify for

rule, you are no longer married if you are widowed.)

innocent spouse relief if you meet the other requirements.

•

You were not a member of the same household

The understatement of tax due to the $5,000 of gambling

(explained next) as the spouse with whom you filed

winnings will not qualify for relief.

the joint return at any time during the 12 –month

period ending on the date you file Form 8857.

Indications of Unfairness for Innocent

Spouse Relief

Members of the same household. You and your spouse

are not members of the same household if you are living

The IRS will consider all of the facts and circumstances of

apart and are estranged. However, you and your spouse

the case in order to determine whether it is unfair to hold

are considered members of the same household if any of

you responsible for the understatement.

the following conditions are met.

The following are examples of factors the IRS will con-

sider.

1) You and your spouse reside in the same dwelling.

•

2) You and your spouse reside in separate dwellings

Whether you received a significant benefit (defined

but are not estranged, and one of you is temporarily

next), either directly or indirectly, from the under-

absent from the other’s household as explained in

statement.

(3) below.

•

Whether your spouse deserted you.

3) Either spouse is temporarily absent from the house-

•

Whether you and your spouse have been divorced

hold and it is reasonable to assume that the absent

or separated.

spouse will return to the household, and the house-

•

hold or a substantially equivalent household is main-

Whether you received a benefit on the return from

the understatement.

tained in anticipation of the absent spouse’s return.

Examples of temporary absences include absence

For other factors, see Indications of unfairness for equita-

due to imprisonment, illness, business, vacation, mil-

ble relief later under Equitable Relief.

itary service, or education.

Significant benefit. A significant benefit is any benefit in

Burden of proof. You must be able to prove that you

excess of normal support. Normal support depends on

meet all of the requirements for separation of liability (ex-

your particular circumstances. Evidence of a direct or indi-

cept actual knowledge) and that you did not transfer prop-

rect benefit may consist of transfers of property or rights to

erty to avoid tax (discussed later). You must also establish

property, including transfers that may be received several

the basis for allocating the erroneous items.

years after the year of the understatement.

Limitations on Relief

Example. You receive money from your spouse that is

beyond normal support. The money can be traced to your

Even if you meet the requirements discussed previously, a

spouse’s lottery winnings that were not reported on your

request for relief by separation of liability will not be

joint return. You will be considered to have received a

granted in the following situations.

significant benefit from that income. This is true even if

your spouse gives you the money several years after he or

1) The IRS proves that you and your spouse trans-

she received it.

ferred assets to one another as part of a fraudulent

scheme. A fraudulent scheme includes a scheme to

defraud the IRS or another third party, such as a

Relief by Separation of Liability

creditor, ex-spouse, or business partner.

2) The IRS proves that at the time you signed your joint

Under this type of relief, you allocate (separate) the under-

return, you had actual knowledge (explained next) of

statement of tax (plus interest and penalties) on your joint

any erroneous items giving rise to the deficiency that

return between you and your spouse (or former spouse).

were allocable to your spouse. For the definition of

The understatement of tax allocated to you is generally the

erroneous items, see Erroneous Items earlier under

amount you are responsible for. See How To Allocate the

Innocent Spouse Relief.

Understatement of Tax, later.

3) Your spouse (or former spouse) transferred property

This type of relief is available only for unpaid liabilities

to you to avoid tax or the payment of tax. See Trans-

resulting from understatements of tax. Refunds are not

fers of Property To Avoid Tax, later.

allowed.

To request relief by separation of liability, you must have

filed a joint return and meet either of the following require-

Actual Knowledge

ments at the time you file Form 8857.

•

You are no longer married to, or are legally sepa-

The relief discussed here does not apply to any part of the

rated from, the spouse with whom you filed the joint

understatement of tax due to your spouse’s erroneous

Page 5

Publication 971 - Instructions Innocent Spouse Relief Forms - 2003 Page 5

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