Innocent Spouse

Is the IRS Holding You Accountable for Your Spouse’s Debt?

When a married couple files a joint tax return, both spouses are generally responsible for the total tax debt unless the IRS grants relief. Here’s what you need to know:

Table of Contents

Responsibility for a Spouse’s Tax Debt:

Married taxpayers filing jointly are jointly and severally liable for tax, interest, and penalties. This can be problematic if one spouse is unaware of the other’s taxable income. Relief options exist under specific IRS guidelines:

Innocent Spouse Relief:

Granted if a joint return has an understatement of tax due to one spouse’s erroneous items.

The filing spouse must prove ignorance of the tax understatement within two years after IRS collections begin.

Separation of Liability:

One spouse may be granted relief for their part of tax debt for understatement of tax.

Filing for relief must occur within two years after IRS collections begin, and specific requirements must be met.

Equitable Relief:

Available if a spouse doesn’t qualify for innocent spouse or separation of liability relief.

Factors for tax debt help are considered, and relief may be granted for understatement and/or underpayment of tax liability.

Can Innocent Spouse Relief Protect Your Property Against Tax Liens?

Filing IRS Form 8857 allows a separate tax liability request, potentially reducing the innocent spouse’s tax liability. This may prevent the IRS from seizing or foreclosing on property. If relief is denied, further action can be taken, including appealing to the U.S. Tax Court with a tax attorney.

Why are Both Spouses Held Liable?

When filing jointly, the IRS views a couple as one entity. Even if one spouse was the sole earner, both are considered 100% responsible for taxes. After divorce, the innocent spouse may still be held accountable for the tax debt, including interest and penalties.

What Factors Does the IRS Consider?

There’s a limited time to file for innocent spouse relief, usually within two years after the IRS’s first collection attempt. The IRS considers factors such as knowledge of erroneous items, financial situation, business experience, and more. Strict standards ensure relief is granted to spouses genuinely innocent and unfairly held liable for the tax debt.

It’s crucial to understand these relief options and requirements, as the IRS thoroughly investigates each case. If all criteria are met, relief can be obtained, protecting innocent spouses from unjust tax burdens.