Publication 971 (Rev. April 2008) - Innocent Spouse Relief (Page 19 of 23) in pdf

Questions & Answers

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You must request relief within 2

You are no longer married to, or

This section answers questions

years after the date on which the

are legally separated from, the

commonly asked by taxpayers about

IRS first began collection activity

spouse with whom you filed the

innocent spouse relief.

against you after July 22, 1998.

joint return for which you are re-

questing relief. (Under this rule,

What is joint and several liability?

you are no longer married if you

What are “erroneous items”?

are widowed.)

When you file a joint income tax return,

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You were not a member of the

the law makes both you and your

Erroneous items are any deduc-

same household as the spouse

tions, credits, or bases that are incor-

spouse responsible for the entire tax

with whom you filed the joint re-

liability. This is called joint and several

rectly stated on the return, and any

turn at any time during the

liability. Joint and several liability ap-

income that is not properly reported on

12-month period ending on the

the return.

plies not only to the tax liability you

date you file Form 8857.

show on the return but also to any

What is an “understated tax”?

additional tax liability the IRS deter-

mines to be due, even if the additional

Why would a request for separation

tax is due to the income, deductions,

You have an understated tax if the IRS

of liability relief be denied?

or credits of your spouse or former

determined that your total tax should

spouse. You remain jointly and sever-

be more than the amount actually

Even if you meet the requirements

shown on your return. For example,

ally liable for taxes, and the IRS still

listed earlier, a request for separation

can collect from you, even if you later

you reported total tax on your 2006

of liability relief will not be granted in

divorce and the divorce decree states

return of $2,500. IRS determined in an

the following situations.

that your former spouse will be solely

audit of your 2006 return that the total

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responsible for the tax.

tax should be $3,000. You have a

The IRS proves that you and

$500 understated tax.

your spouse transferred assets

How can I get relief from joint and

to one another as part of a fraud-

several liability?

Will I qualify for innocent spouse

ulent scheme.

relief in any situation where there is

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The IRS proves that at the time

There are three types of relief for filers

an understated tax?

you signed your joint return, you

of joint returns: “innocent spouse re-

had actual knowledge of any er-

lief,” “separation of liability relief,” and

No. There are many situations in

roneous items giving rise to the

“equitable relief.” Each type has differ-

which you may owe tax that is related

deficiency that are allocable to

ent requirements. They are explained

to your spouse, but not be eligible for

your spouse.

separately below.

innocent spouse relief. For example,

you and your spouse file a joint return

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Your spouse (or former spouse)

What are the rules for innocent

on which you report $10,000 of income

transferred property to you to

and deductions, but you knew that

spouse relief?

avoid tax or the payment of tax.

your spouse was not reporting $5,000

To qualify for innocent spouse relief,

of dividends. You are not eligible for

What are the rules for equitable re-

innocent spouse relief because you

you must meet all of the following con-

lief?

ditions.

have knowledge of the understated

tax.

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You must have filed a joint return

Equitable relief is only available if

which has an understated tax.

What are the rules for separation of

you meet all of the following condi-

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liability relief?

The understated tax must be due

tions.

to erroneous items of your

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You do not qualify for innocent

spouse (or former spouse).

Under this type of relief, you allocate

spouse relief, separation of liabil-

(separate) the understated tax (plus

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You must establish that at the

ity relief, or relief from liability

interest and penalties) on your joint

time you signed the joint return,

return between you and your spouse.

arising from community property

you did not know, and had no

law.

The understated tax allocated to you is

reason to know, that there was

generally the amount you are respon-

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an understated tax.

You have an understated tax or

sible for. To qualify for separation of

underpaid tax. See Note later.

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Taking into account all of the

liability relief, you must have filed a

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facts and circumstances, it would

joint return and meet either of the fol-

You did not pay the tax. How-

be unfair to hold you liable for

lowing requirements at the time you

ever, see Refunds, earlier, for

the understated tax.

file Form 8857.

exceptions.

Publication 971 (April 2008)

Page 19

Publication 971 (Rev. April 2008) - Innocent Spouse Relief Page 19

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