Innocent Spouse Relief and Form 8857: Who Can Ask for It

On a joint return, you and your spouse are each responsible for the full tax, interest, and penalties. If you believe that only your spouse or former spouse should be held responsible, you can request relief by filing Form 8857, Request for Innocent Spouse Relief. IRS: About Form 8857

Relief is not automatic, and the IRS decides each request on its facts. IRS: Instructions for Form 8857

The four types of relief

1. Innocent spouse relief. This applies to understated tax. Understated tax comes from income, deductions, credits, or basis that were left out or reported wrong on the joint return. You may have relief for the part you did not know about.
2. Separation of liability relief. This applies to understated tax. You may qualify if you are divorced, legally separated, or lived apart from your spouse for the 12 months before you file. It does not apply to items you knew about when you signed the return.
3. Equitable relief. This applies to understated tax and to unpaid tax. Unpaid tax is tax shown properly on the return that was not paid. The IRS considers all the facts and asks whether holding you liable would be unfair.
4. Community property relief. This applies to married people in community property states who did not file a joint return. The states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

Equitable relief is the only type that covers unpaid tax. IRS: Instructions for Form 8857

An example of understated tax

IRS example. You and your former spouse filed a joint return showing $5,000 of tax, which was fully paid. Later the IRS finds $10,000 of income that your former spouse earned but did not report. With that income, the total tax becomes $6,500. The understated tax is $1,500, and you and your former spouse are both liable for it. IRS: Instructions for Form 8857

Form 8857 is not the same as Form 8379

If the IRS took part of your joint refund to pay your spouse's past-due debt, that is a separate issue. You ask for your share of that refund on Form 8379, Injured Spouse Allocation. You may file Form 8379 and Form 8857 together if both apply. IRS: Instructions for Form 8857

The IRS must contact your spouse

By law, the IRS must contact your spouse or former spouse about your request. The instructions say there are no exceptions, including for victims of abuse or domestic violence. Keep this in mind before you file. IRS: Instructions for Form 8857

When you should not file

Do not file Form 8857 for a year if a court already decided whether to grant relief. Do not file if you entered into an offer in compromise with the IRS for that liability. IRS: Instructions for Form 8857

When to file

File as soon as you learn of a liability that you believe only your spouse should pay. The form must be filed no later than six months before the period to assess tax for that year expires. If the IRS starts an examination during that six-month period, the latest time to ask is 30 days after the date of the IRS initial contact letter to you. IRS: Instructions for Form 8857

How much refund you can get

If you file within 3 years after you filed the return, a refund cannot be more than the part of the tax you paid in the 3 years before you file Form 8857, plus any extension of time to file the return. If you file after that 3-year period, but within 2 years from the time you paid the tax, the refund cannot be more than the tax you paid in the 2 years before you file. Withholding and estimated payments made with the joint return are not refundable. IRS: Instructions for Form 8857

Signing the form

The IRS will not consider a form you do not sign. Date it, and keep a copy. If a paid preparer prepares Form 8857, the preparer must sign it and include a Preparer Tax Identification Number (PTIN). IRS: Instructions for Form 8857

Your rights

Publication 1 describes the right to know that relief may be available on a joint return. For more detail on innocent spouse relief, see Publication 971. IRS: Publication 1, Your Rights as a Taxpayer

Steps to take

1. Identify the tax year and the item that caused the understated or unpaid tax.
2. Check which type of relief could apply to your facts.
3. Check the three-year and two-year refund limits, and the six-month filing window.
4. Write down what you knew when you signed the joint return.
5. Sign and date Form 8857, and keep a copy with your tax records.

General information, not advice about your situation.

Sources: Sources: IRS, About Form 8857, Request for Innocent Spouse Relief (https://www.irs.gov/forms-pubs/about-form-8857); IRS, Instructions for Form 8857 (https://www.irs.gov/instructions/i8857); IRS, Publication 1, Your Rights as a Taxpayer (https://www.irs.gov/pub/irs-pdf/p1.pdf) This is general information, not advice about your specific return.

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