The IRS can sometimes saddle you with a tax debt that is actually the responsibility of your spouse or ex-spouse. If the actions of your spouse caused the tax problem and you were unaware of or had no part in those actions, you can use the IRS Form 8857 to request a tax resolution called “innocent spouse relief” and have the tax debt and penalties removed.
What qualifies for Relief?
There are a few different circumstances that qualify as innocent spouse relief, such as:
- You were/are married and filed a joint tax return
- Your former or current spouse reported income on a joint return incorrectly
- You can prove that when you signed said joint return, you weren’t aware that the income was incorrectly reported
If you fall into one of the above circumstances, the IRS will consider it unfair to hold you liable for the unpaid taxes and thus grant you innocent spouse relief.
Three Types of Relief
Innocent spouse relief falls into three main types. These include:
1. Innocent Spouse Relief
The traditional innocent spouse relief means you can be excused of responsibility for paying tax, interest, and penalties if your spouse did something wrong on your tax return that you had no knowledge of.
2. Relief by Separation of Liability
Relief by separation of liability means you receive partial relief: you and your spouse divide the understatement of tax, including interest and penalties on your joint return.
3. Equitable Relief
You may use this claim if you do not qualify for the other two types of innocent spouse relief. If the IRS believes it inequitable or unfair to hold one spouse responsible for tax, interest, and penalties, you may still be relieved through equitable relief. This usually involves the IRS considering more factors such as economic hardship or spousal abuse.
Should you include a Letter with Form 8857?
You can include a letter with your form as well as any other information you would like the IRS to consider.
When should you file Form 8857?
It is important to file Form 8857 as soon as you become aware of a tax liability you believe is related to your spouse. You may become aware of such a tax liability because the IRS sends you a notice or the IRS is examining your tax return and proposing to increase your tax liability.
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