When you sign a joint tax return with your spouse, you both become responsible for every dollar owed. That includes any errors, omissions, or fraud on that return. Even if you knew nothing about the problems. This concept is called joint and several liability. It can leave you facing a massive tax bill for mistakes you didn’t make.
But there’s a path forward. Innocent spouse relief can protect you from unfair tax debt when your spouse or former spouse underreported income or made errors on your joint return.
What Joint and Several Liability Really Means
Under Internal Revenue Code (IRC) Section 6013(d)(3), both spouses who file jointly are equally responsible for the entire tax liability. The IRS can collect the full amount from either person. It doesn’t matter who earned the income. It doesn’t matter who prepared the return. It doesn’t matter who managed the finances. The IRS can pursue you for your spouse’s tax mistakes.
This creates serious problems when marriages end or when one spouse hides financial information from the other. You can find yourself on the hook for tens of thousands of dollars in back taxes, penalties, and interest for income you never saw.
When Innocent Spouse Relief Applies
Innocent spouse relief exists to fix these unfair situations. It allows you to separate your tax liability from your spouse’s when specific conditions are met.
The IRS receives significant numbers of these requests and rejects a huge percentage of them. According to a federal audit, from 2019 to 2021, the revenue agency processed 47,892 innocent spouse claims but denied 48% of them. These numbers show how many taxpayers face this issue.
Three main types of relief are available under IRC Section 6015:
- Traditional Innocent Spouse Relief under IRC Section 6015(b)
- Separation of Liability Relief under IRC Section 6015(c)
- Equitable Relief under Section 6015(f).
Each type has different requirements and applies to different situations. We discuss each below.
“Traditional” Innocent Spouse Relief Requirements
The original type of innocent spouse relief covered fewer taxpayers until the law was expanded in 1998. Today, this “traditional” type is just one of several pathways to relief, and is encapsulated in IRC Section 6015(b). Eligibility for traditional spouse relief has five strict requirements:
You and your spouse filed a joint return.
This is usually straightforward. Most married couples file jointly to get better tax rates.
The return has an understatement of tax, attributable to your spouse.
There must be an error that led to you owing more tax than the return showed. This often involves unreported income, overstated deductions, or improper tax credits. Further, the understatement must be due to your spouse’s erroneous items, meaning related to their income, deductions, or credits – not yours.
You did not know and had no reason to know about the understatement.
This is often the hardest element to prove. Courts have ruled that knowing about the transaction that created the problem can count as knowledge, even if you didn’t know about the tax consequences.
The IRS considers many factors when deciding if you knew or should have known:
- The nature of the erroneous item
- Your financial situation
- Your educational background and business experience
- How much you participated in the activity that created the problem
- Whether you failed to ask questions about suspicious items
- Whether the error was different from prior years.
It would be inequitable to hold you liable.
The IRS looks at whether you benefited from the understatement, whether your spouse concealed information from you, whether you’ve been deserted or divorced, and other circumstances.
You requested relief within two years.
The deadline starts when the IRS begins collection activities against you.
Separation of Liability Relief
Under IRC Section 6015(c), separation of liability relief works differently. It allocates the tax deficiency between you and your spouse based on what each person should have reported.
You must meet one of these conditions to qualify:
- You’re divorced or legally separated.
- You haven’t lived with your spouse for at least 12 months before requesting relief.
- You’re widowed.
This type of relief essentially asks the IRS to treat you as if you had filed separately. You’re only responsible for the tax attributable to your items.
However, you can’t use this option if you knew about the items that created the deficiency. The exception is if you were a victim of domestic abuse and couldn’t challenge the return out of fear of retaliation.
Equitable Relief for Other Situations
Equitable relief under Section 6015(f) is a catch-all provision. It applies when you don’t qualify for the other two types, but it would still be unfair to hold you liable.
To decide on a request for equitable relief, the IRS looks at many factors under Revenue Procedure 2013-34, including:
- Your marital status
- Whether paying would cause economic hardship
- What you knew or should have known
- Any legal obligations to pay in divorce decrees
- Whether you benefited from the unpaid taxes
- Your compliance with tax laws since then
- Your mental or physical health.
For equitable relief, timing matters. If the tax hasn’t been paid, you must request relief before the 10-year collection statute expires under IRC Section 6502. If you already paid and want a refund, you generally have three years from filing or two years from payment, whichever is later.
Special Protections for Domestic Abuse Victims
The IRS recognizes that domestic abuse can prevent someone from questioning a tax return or refusing to sign it.
Revenue Procedure 2013-34 specifically expanded how the IRS considers abuse and financial control. If you were afraid to challenge errors because of your spouse’s behavior, this can support your claim for relief.
Evidence of abuse can include:
- Medical records
- Police reports
- Court documents, like restraining orders
- Witness statements
- Photographs of injuries
- Counseling records.
New York State Innocent Spouse Relief
The state of New York offers parallel relief options for state income taxes. You file Form IT-285 to request traditional innocent spouse relief, separation of liability, or equitable relief for New York State taxes.
The New York State Department of Taxation and Finance considers similar factors to the IRS. However, there’s an important difference: you must usually have been granted federal innocent spouse relief under IRC Section 6015 to qualify for New York State relief.
Your refund options are also more limited in New York. You can only get back payments you made with your own money. Payments made with the joint return or by your spouse aren’t refundable.
How to Request Innocent Spouse Relief
You request the IRS by filing Form 8857, Request for Innocent Spouse Relief. This six-page form asks detailed questions about your tax situation, your relationship with your spouse, and the circumstances that led to the tax debt.
The form covers all three types of relief. You don’t need to figure out which type applies to your situation. The IRS will consider all forms of relief you might qualify for.
Key sections of Form 8857 include:
- Part I: Checking whether the form applies to you
- Part II: Your personal information and contact details
- Part III: Your explanation of why you qualify, including what you knew about the errors and how you learned about them
- Part IV: Your current and past financial situation, including income, assets, and expenses
- Part V: Optional disclosure if you are a victim of domestic abuse or violence
- Part VI: Any additional information you wish to include
- Part VII: Confirmation that you want a refund, and finally, your signature and certification that the information is true.
Mail your completed form to this address if you’re using USPS:
Internal Revenue Service
P.O. Box 120053
Covington, KY 41012
Or to this address if you’re using a private delivery company:
Internal Revenue Service
7940 Kentucky Drive, Stop 840F
Florence, KY 41042.
Include supporting documentation with your request:
- Copies of the tax returns in question
- IRS notices you’ve received
- Financial records showing your income and assets
- Divorce decrees or separation agreements
- Evidence of abuse, if applicable
- Any other documents that support your claim.
What Happens After You File
The IRS will acknowledge receipt of your Form 8857. An examiner in the Centralized Innocent Spouse Operations unit will review your case. The examiner will likely request additional information.
The IRS must notify your spouse or former spouse about your request. This happens even if you claim domestic abuse. Your spouse can provide information and contest your request. They can also appeal if relief is granted to you.
The review process can take six months or longer. While you wait, continue filing your tax returns and making any required payments.
When the IRS completes its review, you’ll receive a letter of determination. This letter explains whether relief was granted and for which tax years.
If Your Request Is Denied
You have 90 days from receiving a denial letter to appeal. File Form 12509, Statement of Disagreement, to request an appeals conference.
If Appeals also denies your request, you can petition the United States Tax Court for review. You must file your petition within 90 days of the final determination.
Tax Court review is important because it provides an independent evaluation of your case. However, the court generally can only consider evidence you already provided to the IRS, unless it’s newly discovered or was previously unavailable.
Common Mistakes That Hurt Your Case
Many innocent spouse requests fail because of preventable errors such as:
- Filing too late. For traditional innocent spouse relief and separation of liability, you must file within two years of the IRS beginning collection activity. Don’t wait until the last minute.
- Insufficient documentation. General statements don’t help. Provide specific facts, dates, and documentation that prove your case.
- Admitting knowledge. Be careful how you describe what you know. Even knowing about your spouse’s job or business can be considered knowledge of the source of income.
- Claiming you signed without reading. Courts have consistently held that signing a return without reading it shows negligence, not lack of knowledge. You’re expected to review returns before signing.
- Failing to respond to IRS requests. If the examiner requests additional information, respond promptly and completely. Non-response can lead to denial.
Why Legal Representation Matters
Innocent spouse cases involve complex legal standards and fact-intensive analysis. Small details in how you present your case can make the difference between approval and denial. And with nearly half of innocent spouse requests denied by the IRS, it’s crucial to have thorough and knowledgeable legal guidance in presenting your case.
Attorney John D’Amato has extensive experience helping New York clients navigate IRS debt issues, including innocent spouse relief. His firm understands both the federal tax law under IRC Section 6015 and New York State requirements.
Attorney D’Amato’s clients consistently praise his thorough approach and clear communication. One client stated, “John and his support staff were excellent. John always took the time to answer my questions right away, either by phone or email. Super efficient and friendly team.”
Another client noted, “I don’t think I could have a better lawyer than Mr. John D’Amato. Mr. John D’Amato saved my life and gave me a new life to start fresh.”
These results reflect the firm’s commitment to protecting clients from unfair tax liabilities.
Other Options If You Don’t Qualify
If you don’t qualify for innocent spouse relief, you may have other options to resolve your tax debt:
- Offer in compromise allows you to settle your tax debt for less than the full amount if paying would create financial hardship.
- Currently Not Collectible status temporarily suspends IRS collection activity if you can’t afford to pay basic living expenses and the tax debt.
- Installment agreement lets you pay your tax debt over time in monthly payments.
- Penalty abatement can eliminate penalties (but not the underlying tax) if you have reasonable cause.
Discuss your individual situation through a free consultation with Attorney John D’Amato. He can listen to your story, evaluate which option makes sense for your situation, and help you pursue the best resolution.
Call John D’Amato for Help With Innocent Spouse Relief
Innocent spouse relief can protect you from unfair liability, but you must act within strict time limits and under meticulous rules.
John D’Amato, PLLC, is a top-rated tax resolution firm serving New York. Our team has helped numerous clients successfully resolve complex IRS debt issues. You can view client testimonials to see real results from satisfied clients who found relief from overwhelming tax burdens.
If you’re facing tax debt from a joint return and believe your spouse is responsible for the errors, contact John D’Amato today.
Call (716) 703-9099 for a free consultation.
Don’t wait until the IRS starts seizing your wages or bank accounts. The sooner you act, the more options you have to resolve your tax debt and protect your financial future.