Generally, married couples choose to file their income tax returns jointly on their Form 1040. That means, their filing status is Married Filing Jointly. When the returns are filed jointly, the liability arising thereof is also joint and several. But sometimes it happens that one’s spouse or former spouse fails to report income, or may have claimed improper deductions or credits or may have reported income improperly. In such cases, if one qualifies then he/she can claim for Innocent Spouse Relief.

What is Joint and Several Liability?

Joint and several liability means that both the taxpayers filing MFJ return are equally liable for the tax liability, any additions to tax, any interest or penalties that arise from the tax return. This applies even if they file for divorce later or even if they get divorced.

Joint and several liability means that both the taxpayers filing MFJ return are equally liable for the tax liability, any additions to tax, any interest or penalties that arise from the tax return. This applies even if they file for divorce later or even if they get divorced.

How does one qualify for Innocent Spouse Relief?

The following three conditions are needed to be met:

• One has filed a joint return
• The tax is understated means the IRS claims that your total tax should be more than the amount that was shown on your 1040 return.
• The tax is understated due to erroneous items of your spouse, which means spouse has unreported income or incorrect deduction, credit or basis.
• One has to show that when he/she signed the return, he/she was unaware and no reason to know that the understated tax existed (or the extent to which the understated tax existed).
• Considering all the facts and circumstances, it would be unfair to hold innocent one liable for the understated tax.

What are the indications of Unfairness for Innocent Spouse Relief?

The IRS considers various facts and depending on the particular case’s circumstance determines whether it is unfair for one to be held responsible for the understated tax.

Following are few examples of factors that IRS considers.

• Whether the innocent spouse received a significant benefit, either directly or indirectly.
• Whether the innocent spouse’s husband/wife has deserted the innocent spouse. Deserted means isolated/abandoned the spouse.
• Whether the spouses are separated or divorced.

How to request Innocent Spouse Relief?

To request for Innocent Spouse Relief one should file Form 8857. This form’s first part asks details about whether one should file this form by asking if they relate to the paragraph given in that form. The paragraph describes about the innocent spouse’s situation. The first part also asks about for which years does one wants to claim himself/herself as innocent spouse.

The second part asks basic information about the individual and his/her spouse. It asks about information such as Name, SSN, address, current marital status, highest level of education and if the innocent spouse had some physical or mental health problem when the return was filed or even now.

The third part asks if the person claiming innocent spouse was involved in preparing the return of the year for the years he/she is asking of relief. Further this part asks few questions that will help IRS to know what actually the case is.

The fourth part asks about the financial information of the individual claiming innocent spouse.

Fifth part asks if the individual claiming innocent spouse was a victim of Domestic Violence.

Part six asks if the individual would like to provide any additional information that would help the IRS to know that it was unfair for the spouse to be held liable for the tax.

Part seven asks about if the individual would like a refund.

Below is a snippet of Form 8857

When to File Form 8857?

One should file form 8857 as soon as an individual becomes aware of a tax liability for which the individual is not responsible and only his/her spouse should be held responsible. One may become aware of the tax liability when IRS is examining and asking to increase the tax liability and also when IRS sends notice. This form should generally be filed no later than 2 years after the date on which IRS first tried to collect tax from you.