IRS Innocent Spouse Relief

Innocent spouse relief is a provision of the Internal Revenue Code that allows a spouse to avoid being held liable for unpaid taxes or penalties that result from a spouse’s improper tax filing or underpayment. The provision is designed to protect a spouse who had no knowledge or involvement in the tax liability or tax fraud committed by their spouse.

It is important to note that Innocent spouse relief only applies to your spouse’s income from employment or self-employment. It does not apply to your own income, business taxes, household employment taxes, individual shared responsibility payments or trust fund penalties for employment taxes. 

Eligibility

Not Eligible

Other Innocent Spouse Relief Options

When you apply for IRS innocent spouse relief, the IRS may apply 2 other types if you are eligible: Separation of Liability Relief and Equitable Relief. 

Separation of Liability 

If you are no longer married or living together, separation of liability relief may absolve you from paying your former spouse’s portion of any unpaid taxes from a joint tax return. This relief divides the additional taxes owed between you and your ex-spouse, based on your respective incomes and assets. You will then only be accountable for paying your portion of the outstanding tax debt.

Equitable Relief

Equitable relief can provide relief from tax liabilities if it would be unfair to hold you accountable for taxes that your spouse understated or underpaid on your joint tax return. Factors that include fairness include your marital status, economic hardship you might suffer without relief, whether you significantly benefited from not paying tax or underreporting your tax, your mental and physical health and more. The IRS will also consider your education level and your change in spending habits when considering equitable relief. 

Seek professional tax help

The IRS spouse relief process can be overwhelming and all of the factors the IRS considers when deciding on your eligibility can be hard to understand. If you think that you might qualify for IRS innocent spouse relief but don’t know where to being, complete our free consultation form by clicking the link below. You will be connected with a tax professional for a free, no-obligation, consultation about your tax debt and relief options.