Qualifying for Innocent Spouse Relief While Going Through Divorce

Divorce often causes a significant financial burden, in addition to serious tax implications. Divorce proceedings often lead to spouses becoming aware for the first time of their joint tax issues with an ex-spouse. At Rosefelt & Associates, our professional dual licensed tax attorney and CPA assists clients in addressing and resolving these types of issues. In many cases, you may be eligible for innocent spouse relief for some or all of your financial responsibility in the tax debts your former spouse incurred.

Innocent Spouse Relief and Separation of LiabilityInnocent Spouse Relief Qualifications

Married couples generally file a joint tax return, and may continue to do so even once they are separated or filing for divorce. Problems can arise if your spouse owes money to the Internal Revenue Service (IRS) for unpaid or back taxes, penalties, and interest, which you can be held liable for.

IRS guidelines provide a way of avoiding this liability, even if your divorce decree states that you are responsible for these debts. The IRS offers three types of relief for joint liability between spouses:

    • Innocent Spouse Relief: This can help you avoid liability from taxes owed unreported or improperly reported income or improper deductions and credits.
    • Separation of Liability Relief: This allows for a separate allocation of tax liability for money owed from a prior joint return filed by you and your former spouse, requiring you to pay only that share of back taxes that are allocated to you.
    • Equitable Relief: This may apply if you do not qualify for innocent spouse relief or separation of liability relief for something incorrectly reported on a joint return and generally attributable to your spouse.

To be eligible for either of these types of tax relief, you must apply within two years of the first attempt by the IRS to collect on the debt.

Who Qualifies For Innocent Spouse Relief?  

The IRS will determine your eligibility for tax relief by the answers you provide on IRS Form 8857. Each of the above requires you to meet the following qualifications:

Innocent Spouse Relief

  • You filed a joint tax return with a tax deficiency that can be solely attributed to your spouse’s error;
  • At the time the return was filed, you did not know nor did you have reason to know of the error;
  • The circumstances dictate that it would be unfair to hold you liable for the tax owed.

Separation of Liability Relief

  • You are separated, divorced, or widowed from the spouse who filed the joint return;
  • You have not been a member of the same household with your former spouse in the preceding 12-month period;
  • You had no knowledge of the understatement of tax at the time the return was filed.

Even if you fail to meet these qualifications, you may still be entitled to equitable relief for improperly reported income or deductions, or if the amount of tax was reported but not paid.  

Contact Our Experienced Dual Licensed Tax Attorney and CPA Today

If you owe money to the IRS as a result of a tax return filed by your spouse, contact Rosefelt & Associates today. Our experienced dual licensed tax attorney and CPA can help to protect your rights and financial interests, while advising you on the options available to avoid tax debts. We serve Maryland, Washington, D.C., Virginia, and throughout the nation; call or contact our office online today to request a confidential case consultation.