Tax Debt Relief

Do You Qualify for Innocent Spouse Relief? 7 Important Things You Need to Know

reviewed by Robin T Young
November 12, 2019

Fun fact: 79% of people think lying on tax returns is morally wrong… which leaves 21% who don’t.

Coupled with this is the not-so-fun fact that the IRS does not always forgive, even honest, mistakes.

This makes tax evasion penalties a relatively common occurrence. One which can have devastating effects on your budget… if the person who has attracted this debt is your spouse.

If you and your spouse file return jointly, you are as liable for his or her debts to the IRS as your own. This means that come tax time, you could be in for a payment for their wrongdoing or evasion.

The good news is that there is something you can do about it. It is called Innocent Spouse Relief, and we are going to reveal the 7 things you need to know about it.

Read on to find out what these are.

1. You Need to Have Proof to Claim Innocent Spouse Relief

To qualify for innocent spouse tax relief, you will need to prove without a doubt that you had no knowledge of any tax irregularities on your joint return. Coming up with concrete proof can be hard, considering that filing your tax return with your better (or worse) half is a private affair.

Fortunately, there are a number of things that the IRS takes into account when evaluating your appeal:

  • Education levels of both partners
  • Financial education
  • Level of involvement in the marriage’s financial affairs
  • Your tax compliance history
  • Relationship status
  • Mental or physical disabilities
  • Abuse
  • The chances of you being able to spot the infringement

All of these factors will play a role in determining if the IRS deems you innocent of the tax infringement. For example, if a spouse embezzled funds at work, and lumped them together with his or her paycheck, the other spouse could reasonably claim that they had no knowledge of this.

2. Time is of the Essence

As with all cases of getting out of tax debt, time is of the essence. The IRS gives innocent spouses two years in which to submit an innocent spouse relief form.

This time period begins at the initial IRS collection attempt. You have two years from this date to file the IRS form 8379 to appeal for relief.

If your tax refund will be affected for multiple years by the debt, you must file the form every tax year that you wish to get innocent spouse tax relief.

Evaluate your tax situation

By evaluating your tax situation, you can identify areas where you may be able to reduce your tax burden and make informed decisions about your financial future.

$125,000 $250,000
I don’t know
$125,000 $250,000

3. If You are Happily Married, It Might Not Work

If your marriage is strong and stable, this may count against your chances of receiving IRS spousal relief. The logic here is that if you and your partner are united in your marriage, it is unlikely that you would not have any knowledge of or part in dirty dealings on your returns.

If you and your partner are divorced, the IRS may take this into account as a positive point towards your case.

However, if you have only filed for a divorce, and are busy sorting out your post-divorce taxes, then this does not necessarily apply.

4. There Are Other Options

If you do not qualify for innocent spouse tax relief, there a few other options. These are:

  • Injured Spouse Relief: You can gain IRS injured spouse status if your tax refund is covering the tax liabilities of your partner that pre-dates your marriage. To apply for this relief you will need to fill out and submit the IRS Form 8379.
  • Separation of Liability Relief: This relieves you of a portion of the tax debt shared between you and your partner under your joint return. The division of the liability will depend on you and your partner’s respective income, assets, and deductions.
  • Equitable Relief: If you do not qualify for innocent spouse tax relief or separation of liability relief, you may apply for this.
  • The U.S. Tax Court: If you have applied for innocent spouse tax relief and been turned down, you can choose to take the matter to the U.S. Tax Court where it can be reviewed.

If you are wondering whether to apply for innocent spouse vs injured spouse relief, consider when the tax debt was incurred. If it was prior to your marriage to your partner, then injured spouse relief will be the better bet.

5. Lying Could Lead You to Be Sued

If you lie or misrepresent any of the information on your innocent spouse relief form, you are liable to be sued by the IRS.

This could land one in even deeper water than that of covering your partner’s tax boo-boos. So make sure that everything you include in the form is 100% accurate and true.

6. You May Receive Partial Relief

Once your application on the innocent spouse relief form has been reviewed, the IRS will decide what decision to make.

There are three outcomes to this.

Your application could be voided, meaning that they found no reason to believe your claims of innocence. Or it could be awarded in full, with 100% of the liability shifted off your name.

Or, you could receive partial relief. This means that while you are relieved of a portion of the liability, you will be required to meet some of it.

7. Your Spouse Will Know About It

As per the law, after you submit the innocent spouse relief form your spouse or ex-spouse will be notified. This is to allow them to participate in the proceedings.

Even if abuse was present in the relationship, the spouse will still need to be notified. But, your personal details such as your address and contact numbers will be withheld from them.

Final Word

Innocent spouse relief is one of the few instances where the IRS may provide a 100% exemption from tax debts. If you have been unfairly burdened with your partner’s tax obligations you should, by all means, apply for innocent spouse tax relief.

Not all applications are accepted, but if you educate yourself about the process you will be halfway there.

So guess what? You just did that. Now that you know these 7 important things about IRS spousal relief you are armed and ready to start the process.

If you are struggling not only with an unjust tax debt but also with the new tax bill standards, check out our guide on how a tax accountant can help.

Clinton F Wassor

Clinton F. Wasser, holding a Master of Science in Legal Studies of Taxation, brings a wealth of expertise in tax planning and compliance to his writing. With a career rooted in the workings of the tax landscape, Clinton navigates difficulties with finesse. Beyond his professional accomplishments, he generously volunteers his time to educate high school students about the nuances of taxes. As an author, Clinton marries his real-world experience with a passion for simplifying tax concepts. He has found that his technique empowers readers to better understand the world of taxation.
Read more