Publication 971 (Rev. April 2008) - Innocent Spouse Relief (Page 6 of 23) in pdf

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The financial situation of you and your spouse (or

Significant benefit. A significant benefit is any benefit in

former spouse).

excess of normal support. Normal support depends on

your particular circumstances. Evidence of a direct or indi-

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Your educational background and business experi-

rect benefit may consist of transfers of property or rights to

ence.

property, including transfers that may be received several

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The extent of your participation in the activity that

years after the year of the understated tax.

resulted in the erroneous item.

Example. You receive money from your spouse that is

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Whether you failed to ask, at or before the time the

beyond normal support. The money can be traced to your

return was signed, about items on the return or omit-

spouse’s lottery winnings that were not reported on your

ted from the return that a reasonable person would

joint return. You will be considered to have received a

question.

significant benefit from that income. This is true even if

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Whether the erroneous item represented a departure

your spouse gives you the money several years after he or

from a recurring pattern reflected in prior years’ re-

she received it.

turns (for example, omitted income from an invest-

ment regularly reported on prior years’ returns).

Separation of Liability Relief

Partial relief when a portion of erroneous item is un-

Under this type of relief, the understated tax (plus interest

known. You may qualify for partial relief if, at the time you

and penalties) on your joint return is allocated between you

filed your return, you had no knowledge or reason to know

and your spouse (or former spouse). The understated tax

of only a portion of an erroneous item. You will be relieved

allocated to you is generally the amount you are responsi-

of the understated tax due to that portion of the item if all

ble for.

other requirements are met for that portion.

This type of relief is available only for unpaid liabilities

resulting from the understated tax. Refunds are not al-

Example. At the time you signed your joint return, you

lowed.

knew that your spouse did not report $5,000 of gambling

To request separation of liability relief, you must have

winnings. The IRS examined your tax return several

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

months after you filed it and determined that your spouse’s

ments at the time you file Form 8857.

unreported gambling winnings were actually $25,000. You

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established that you did not know about, and had no

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

reason to know about, the additional $20,000 because of

rated from, the spouse with whom you filed the joint

the way your spouse handled gambling winnings. The

return for which you are requesting relief. (Under this

understated tax due to the $20,000 will qualify for innocent

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

spouse relief if you meet the other requirements. The

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You were not a member of the same household

understated tax due to the $5,000 of gambling winnings

(explained below) as the spouse with whom you filed

you knew about will not qualify for relief.

the joint return at any time during the 12-month per-

iod 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 understated tax.

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.

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Whether you received a significant benefit (defined

2. You and your spouse reside in separate dwellings

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

but are not estranged, and one of you is temporarily

stated tax.

absent from the other’s household as explained in (3)

•

Whether your spouse (or former spouse) deserted

below.

you.

3. Either spouse is temporarily absent from the house-

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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-

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Whether you received a benefit on the return from

tained in anticipation of the absent spouse’s return.

the understated tax.

Examples of temporary absences include absence

For other factors, see Factors for Determining Whether To

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

Grant Equitable Relief later under Equitable Relief.

tary service, or education.

Page 6

Publication 971 (April 2008)

Publication 971 (Rev. April 2008) - Innocent Spouse Relief Page 6

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