Do Not be Held Responsible for Your Spouse’s Tax Liability
The modern tax code dictates that spouses are jointly and severally liable for the taxes they owe. Joint and several liability means that the Internal Revenue Service may collect the entire liability from either spouse, or may collect a portion of the liability from each spouse.
In some circumstances, it may be unfair to hold a spouse liable for a joint tax liability:
- Do you owe more than $10,000 in tax debt?
- Are you divorced, or have you been separated for more than 12 months?
- Has the IRS contacted you about paying back taxes for a return you filed with your former spouse?
If so, you may qualify for innocent spouse relief.
An individual may have thought that his or her spouse had been paying their joint tax liabilities, and may find out after a divorce that large tax bills are owed for previous years. Or one spouse may have concealed business income from the other spouse, who is now liable for the taxes on that income.
Accordingly, the Internal Revenue Code provides for relief from marital joint and several liability in situations where a joint return has been filed and one spouse believes they should not be held responsible for liabilities caused by their partner (or former partner). To obtain relief, you must file an application on a Form 8857 with the IRS.
Innocent spouse relief is available for both underpayments of tax shown on a tax return, and for understatements of income tax as determined by the Internal Revenue Service. If the spouses did not file a joint return, relief may still be available.
An individual who lives in a “community property state,” such as Washington, may be able to obtain relief if he or she did not know about the income attributable to the other spouse.
The rules surrounding innocent spouse relief are complex, but in general a spouse may be relieved of liability if it is clearly inequitable to hold the requesting spouse liable after considering all of the facts and circumstances of the situation. Under some circumstances, an allocation of the liability between the spouses may be available.