Innocent spouse relief for a joint-return tax bill

The basic idea

When you file a joint return, each spouse is generally responsible for the whole tax shown on it. That can feel deeply unfair when the problem came from something you did not know about, such as income your spouse left off or deductions you never saw. Innocent spouse relief exists for some of those situations.

You ask for it on Form 8857. The IRS says one request covers all types of relief, so you do not have to decide up front which one fits. It reviews your facts against each type. It makes the decision, and nothing here predicts the outcome.

The three types

The IRS describes three forms of relief. Which one fits depends on your circumstances.

• Innocent spouse relief: relief from tax your spouse or former spouse caused on a joint return.
• Separation of liability: for people who are divorced, separated or living apart, dividing responsibility for the tax.
• Equitable relief: a third type with its own time limits, one for balances you still owe and another for refunds or credits.

Time limits are the part to read carefully

The IRS landing page gives a short version of the deadline, but Publication 971 and the Form 8857 instructions are more precise, and they are the better guide. For innocent spouse relief and separation of liability, the limit is generally no later than 2 years after the IRS first tried to collect from you. The publication gives examples of that first collection activity, such as offsetting a refund, a court or bankruptcy claim, a suit to collect, or a notice of your right to a collection hearing.

Equitable relief has different limits. For a balance you still owe, it is generally within the period the IRS has to collect. For a refund or credit, it is generally within 3 years after the return was filed or 2 years after payment, whichever is later. The instructions also describe a separate rule for community property relief. Because the clocks differ and because the documents are older revisions, check for newer versions before relying on a date.

After you file: Appeals and Tax Court

The IRS reviews your request and sends a determination letter. If you disagree, an appeal of the determination is due within 30 days of the date on the letter, according to the IRS page. You can also petition the U.S. Tax Court. The petition window is 90 days after the final determination letter is mailed, or, if no letter has been issued, you may petition once the waiting period measured from your Form 8857 filing has passed. Confirm the dates and waiting period in the Form 8857 instructions and on your own letter.

Facts that tend to matter

A request is stronger when it is specific. Consider a woman divorced two years ago who learns her ex-husband underreported income on a joint return. She would explain what she knew and when, what she did with the household finances, her current circumstances, and she would attach documents such as the return, the IRS notice and the divorce paperwork. Another person, still married, might describe a spouse who controlled all the money.

Whatever your situation, answer each question on the form completely and keep copies. If you are already in a collection hearing, the IRS says Form 8857 can be attached to the hearing request, which keeps related issues together.

Where a written response fits

Form 8857 asks for a narrative, and many people find the hardest part is organizing the timeline. IRS Audit Defense Pro is software that helps you organize your facts and draft a letter you review and send yourself, which can accompany your form. It is not a law firm, CPA or enrolled agent, and it does not decide whether you qualify. Given the stakes and the number of moving deadlines, a qualified tax professional or a Low Income Taxpayer Clinic is worth considering.

Frequently asked questions

Sources

• IRS: Innocent spouse relief
• IRS Publication 971: Innocent Spouse Relief
• IRS: Instructions for Form 8857
• 26 U.S.C. 6015 (relief from joint and several liability)

Related guides

• Handling an IRS Notice Yourself or Hiring a ProfessionalYou can respond to many IRS notices yourself.
• How to request a Collection Due Process hearingFind the Collection Due Process notice, note the deadline printed on it (generally about 30 days), complete Form 12153 with your reasons, attach what applies, and send it to the hearing address on the notice.
• The Taxpayer Advocate Service: Help When an IRS Problem StallsThe Taxpayer Advocate Service is an independent office within the IRS that can help when an IRS problem is causing financial hardship, has gone unresolved for more than 30 days, or the IRS missed a promised date.
• You received a CP2000. Here is how to read it and replyA CP2000 is a proposal, not a bill and not an audit.
• How to appeal the results of an IRS auditIf you disagree with audit findings, respond to the letter that proposes the changes by the date it gives, which is generally 30 days.