When you’re filing a joint tax return with your spouse, you both share responsibility for the tax return and your resulting tax bill. This can create tax issues if one spouse misrepresents information or makes mistakes that the other person wasn’t aware of.
The IRS offers innocent spouse relief, which could be a solution if you have joint tax liability but are not responsible for underreported income or another tax reporting issue. To apply, you’ll use IRS Form 8857.
This guide walks through everything you need to know about this type of tax relief and using IRS innocent spouse form 8857.
What Is Innocent Spouse Relief?
With joint tax filings, both spouses are liable for the taxes reported and owed. However, there are cases where one person understates their taxes to try to avoid paying everything owed. Taxes are also sometimes understated as the tax rules are complicated, and mistakes happen. If this is your situation and you didn’t know about the mistakes made on the return, you may qualify for innocent spouse relief.
This type of relief doesn’t apply to your own income, employment taxes for the household, Individual Shared Responsibility payments, business taxes, or trust fund recovery tax penalties. It only applies to the taxes due on your spouse’s income that you would otherwise be liable for with the relief.
Eligibility requirements to request innocent spouse relief are as follows:
- You and your spouse filed a joint return
- Errors on the return caused understated taxes
- You were not aware of the errors
If you live in one of the nine community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin), you may be able to claim innocent spouse relief on a separately filed return. However, for that to apply, you must have yet to report the income with the community property income on your separate return, and you must not have known or had reason to know about the unreported income.
Other Types of Innocent Spouse Relief
Aside from the standard innocent spouse relief option, the IRS offers these two additional types:
- Separation of liability relief: This applies if you’re divorced or separated from your spouse and your tax return understated the taxes due.
- Equitable relief: This applies if your spouse understated or underpaid taxes, you’re not eligible for other forms of relief, and the IRS determines that it would be unfair to hold you responsible.
Additionally, under certain circumstances, you may be able to get innocent spouse relief even if you knew about the errors your spouse made if you’re a victim of domestic abuse or if you have mental or physical health problems.
Applying for innocent spouse relief can help resolve complex tax disputes. Talk with a tax attorney about your situation to determine if this is the right option.
Understanding IRS Form 8857
When applying for tax relief, you need to understand the innocent spouse IRS form 8857. This form allows you to request relief from the shared tax liability and related penalties and interest that accrued because of your spouse’s errors.
The IRS uses this form and any documentation you provide to approve or deny your request. Sometimes, the agency will contact you if you need to send additional documentation.
Here is a step-by-step breakdown of how to complete tax Form 8857:
Part I: Determining Eligibility
When you begin to apply for relief using the IRS spousal relief form, the first section asks about your eligibility. You’ll have to review the requirements and answer yes or no to confirm you can apply. You will also need to answer whether the IRS took your share of a joint refund when paying the outstanding tax debts.
This section also requires entering the applicable tax year or years for which you’re asking for innocent spouse relief. Be sure to enter the accurate tax year.
Part II: You and Your Spouse’s Information
This is where you’ll enter your personal information, such as your name, address, and Social Security number. You then provide the same details about your spouse or former spouse.
Then, you’ll provide your current marital status, applicable dates, and the highest level of education you have completed. You must also verify that you did not have a “mental or physical health problem” when filing the applicable returns or when filling out this form.
Part III: Tax Return and Financial Involvement
This section is fairly thorough. You will need to answer questions about your involvement in filing the relevant tax returns, what you knew about your spouse’s income and missing information, any financial problems you were having, your role in household finances, any large purchases made, and any transfer of assets made.
Part IV: Current Financial Situation
The IRS also wants to know about your current finances. Part IV asks for details about your assets, dependents you’re supporting, and monthly income and expenses. Be thorough and accurate with this information.
Part V: Domestic Violence Information
If you were or are a victim of domestic violence or abuse, you will complete Part V. You will answer questions about the situation and describe what you experienced. Attach any documentation you have regarding medical or police reports, protection or restraining orders, documentation of injuries, statements from witnesses, and the like.
Part VI: Additional Information
This section is where you will provide any other information you want the IRS to consider with your request. Explain why it would be unfair for you to be liable for the tax in question.
Part VII: Requesting a Refund
If you qualify for innocent spouse relief and have already paid the tax, you will check the box in this section telling the IRS that you would like a refund.
Following Part VII, you will sign and date the form before submitting it.
Avoiding Common Mistakes with Form 8857
As you’re completing Form 8857, here are a few common mistakes taxpayers make and how to avoid them:
- Missing the Filing Deadline: You have two years from the date you received a notice from the IRS about an audit or unpaid taxes to request innocent spouse relief.
- Not meeting the eligibility requirements: Ensure you meet all qualifications before submitting your application. Otherwise, the IRS will not approve your request.
- Knowing about the errors: If you were aware of the errors on the tax return, or a reasonable person in similar circumstances would have, you’re not able to claim this type of relief.
- Not providing good reasoning or evidence: You must provide a compelling case to receive innocent spouse relief with applicable documentation that supports your request.
IRS Form 8857 Filing and Review Process
Again, you only have two years from receiving an IRS notice to send in your form. You’ll need to fill out Form 8857 and send it through the regular mail as follows:
If you’re sending via USPS, send to:
Internal Revenue Service
P.O. Box 120053
Covington, KY 41012
If you’re sending via a private service, send to:
Internal Revenue Service
7940 Kentucky Drive, Stop 840F
Florence, KY 41042
The IRS also accepts forms via fax: (855) 233-8558.
Once the IRS receives your form, the agency is required to contact your spouse or former spouse about the request. This gives them the chance to be involved in the process. This is a requirement, even if you are the victim of domestic abuse. However, in that situation, the IRS will protect your privacy and not reveal your new name, address, or other details to your spouse or former spouse.
After reviewing your details, ensuring completeness, and contacting the other party, the IRS will send a preliminary determination letter to both of you. If neither of you applies for the preliminary determination, the final determination letter will be sent next.
The IRS uses all the information you provided to make its final decision on whether or not to grant you the relief. Their website states that it could take up to six months to review your request.
If you disagree with the IRS’ decision, you have 30 days to appeal from the date of the preliminary determination letter. You also have 90 days from the date of the final determination letter to contest the IRS’ decision in Tax Court.
Navigating Challenges in Spouse Relief
Of course, these matters can be delicate and stressful. Your request for relief may cause conflict with your spouse or former spouse. This can turn into a major challenge and even prevents some taxpayers from applying for relief when they’re eligible.
Another challenge is providing all the requested information and ensuring it is complete and accurate. You need detailed documentation, correct numbers, and strong evidence to support your request to go through.
It’s always best to discuss your situation with a tax professional, such as a tax attorney. Low-income Taxpayer clinics can also help you if you qualify. Professionals will ensure you are eligible for innocent spouse relief and will help you complete Form 8857 properly for the best chance of approval.
Innocent Spouse Relief Example
Consider this example of when making an innocent spouse relief request is a good idea:
A divorced couple (Jordan and Taylor) filed a joint tax return in 2021 and divorced in 2023. Jordan discovers later that Taylor did not report all of their income after receiving a notice from the IRS about a penalty for underreported income. Jordan was not aware of this misrepresentation when the couple filed their tax return, and because Taylor was hiding the income, Jordan had no reason to be aware of it.
Jordan decides to apply for innocent spouse relief using Form 8857, requesting relief from liability for the taxes due on Taylor’s income from their employment. After the request is filed, the IRS contacts Taylor, but Taylor doesn’t want to be involved in the process. After reviewing the submitted information from Jordan, the IRS determines that Jordan should not be held liable for Taylor’s tax liability. The IRS sends a determination letter indicating the request was approved.
Understand Your Tax Relief Rights With a Tax Attorney
If you believe you qualify for innocent spouse relief, act sooner rather than later to make your request. It’s always a good idea to talk about your situation with a tax attorney who can explain your rights to you and guide you through the process of submitting IRS Form 8857.
If you’re struggling with a tax debt incurred by your former or current spouse without your knowledge, get in touch with Wiggam Law to schedule a consultation with a tax expert.
FAQs About Innocent Spouse Relief Form 8857
What is Innocent Spouse Relief, and Who Qualifies?
The IRS offers innocent spouse relief so that a taxpayer who was unaware of their spouse’s underreporting of income on their joint tax return is not held liable for the associated tax. You may qualify if you were not aware of the error on the tax return.
How Do I File Form 8857 for Innocent Spouse Relief?
Complete Form 8857 with all the applicable details included and send it via mail to one of these two addresses:
Via USPS:
Internal Revenue Service
P.O. Box 120053
Covington, KY 41012
Via private service:
Internal Revenue Service
7940 Kentucky Drive, Stop 840F
Florence, KY 41042
Can I Apply for Innocent Spouse Relief if Still Married to My Spouse?
Yes, you can apply for this type of relief if you are married to your spouse, but it is difficult to qualify in that scenario. It is much easier to qualify if you are separated or divorced.
What Happens After I Submit Form 8857?
The IRS will alert your spouse that you filed this form. The agency will then review your application and documentation and make a determination. If you disagree with the determination, you have 30 days from receiving the letter to appeal.
How Long Does the Innocent Spouse Relief Process Take?
The IRS states that it may take up to six months for them to review your application. It could take more than a year to appeal the IRS determination or go to the Tax Court. The IRS can be slow, so having low expectations and patience is needed.
What Are the Differences Between the Three Types of Innocent Spouse Relief?
The general type of innocent spouse relief applies if you filed jointly with your spouse, they underreported their taxes, and you didn’t know about the error. Separation of liability relief applies if you are divorced or separated from your spouse. Equitable relief applies if you’re not eligible for other forms of relief, but it would be unfair for you to be liable.
Schedule a consultation with our team or call us at (404) 233-9800 now to get started on your tax resolution journey.