Innocent Spouse Relief: How to Separate Your IRS Liability from Your Spouse
When you file a joint tax return, you are jointly and severally liable for all taxes owed — even taxes your spouse created without your knowledge. Innocent Spouse Relief is the IRS mechanism for separating that liability.
What Is Innocent Spouse Relief?
Innocent Spouse Relief allows a taxpayer to be relieved of responsibility for additional tax owed due to the other spouse's errors, omissions, or fraudulent reporting on a jointly filed return. There are three types: Innocent Spouse Relief (traditional), Separation of Liability Relief, and Equitable Relief.
Traditional Innocent Spouse Relief
To qualify for traditional Innocent Spouse Relief, you must show that there is an understatement of tax on the joint return due to erroneous items of your spouse, you did not know or have reason to know about the understatement at the time you signed the return, and it would be unfair to hold you liable given all the facts and circumstances.
Separation of Liability Relief
This type allocates the additional tax between you and your spouse based on each person's share of the items that caused the understatement. It is available only to divorced, legally separated, or widowed taxpayers, or those who have not lived with their spouse for the past 12 months.
Equitable Relief
Equitable relief is available when you do not qualify for the other two types but it would still be unfair to hold you liable. It applies to both understated and underpaid tax (reported correctly but not paid). The IRS considers factors such as legal obligations under a divorce decree, economic hardship, and knowledge of the tax situation.
How to Apply for Innocent Spouse Relief
File Form 8857 (Request for Innocent Spouse Relief) with detailed documentation. Submit as soon as possible — there are time limits. For traditional and separation of liability relief, you must file within 2 years of the first IRS collection action against you. The IRS will notify your spouse and consider their response.
Real-World Example
A woman in Los Angeles discovered after her divorce that her ex-husband had underreported $78,000 in business income on their joint 2019 return. The IRS assessed $19,600 in additional tax plus penalties. She had signed the return without reviewing it. We filed Form 8857 with documentation showing she had no involvement in the business finances and had no knowledge of the underreporting. Traditional Innocent Spouse Relief was granted in full.
Innocent Spouse Relief Help in Los Angeles
Calculus Tax, Inc. handles Innocent Spouse Relief cases throughout Los Angeles, Burbank, and LA County. Call (310) 598-3759 or visit 1050 W. Alameda Ave., Burbank, CA 91506.
Frequently Asked Questions
Can I apply for innocent spouse relief after divorce?
Yes. Innocent spouse relief is available after divorce and in many cases is easier to obtain after legal separation because it demonstrates financial independence from your former spouse.
Will the IRS tell my spouse I filed for innocent spouse relief?
Yes. The IRS is required to notify your spouse and give them an opportunity to respond. This is true even if there is a restraining order — the IRS has a process for handling sensitive situations.
Can I get innocent spouse relief if I signed the return?
Yes. Signing the return does not automatically disqualify you. The standard is whether you knew or had reason to know about the erroneous items at the time you signed.
Is there a deadline to apply for innocent spouse relief?
For traditional and separation of liability relief, you generally have 2 years from the first IRS collection action. For equitable relief, you must apply before the collection statute expires. Apply as soon as you become aware of the issue.
What if the IRS denies my innocent spouse claim?
You can petition the U.S. Tax Court to review the denial, even if you have no other tax dispute pending. You must file the petition within 90 days of the denial notice.
Does innocent spouse relief apply to state taxes?
California has its own innocent spouse program through the FTB (Form 705). Federal and state relief are separate — qualifying for one does not automatically qualify you for the other.
Innocent Spouse Relief: How to Separate Your IRS Liability from Your Spouse Services in Los Angeles
Calculus Tax, Inc. provides innocent spouse relief: how to separate your irs liability from your spouse services to individuals and businesses throughout Los Angeles County. Our licensed CPAs are based in Burbank and serve clients in Los Angeles and surrounding communities.
Our Burbank office serves clients throughout Los Angeles County including Los Angeles, Long Beach, Santa Monica, Glendale, Burbank, and more.
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