April 01, 1998
Innocent Spouse Relief
Many married couples file a joint tax return because of the
benefits it allows. But doing so means that both people are
responsible for the tax and any interest or penalties, even if they
It doesn't matter whether a divorce decree states that a former
spouse is responsible for any amounts due on previously filed
returns. One spouse may be held responsible for all the tax due even
if all the income was earned by the other spouse. People who believe
they should not be responsible for the taxes, interest and penalties
of their spouse or a former spouse can ask the Internal Revenue
Service for innocent spouse relief.
Qualifying as an Innocent Spouse
In 1971, Congress set the conditions for relieving one spouse of
liability for a joint return. All of the conditions must be met for
innocent spouse relief to apply.
These conditions are:
- the spouses filed a joint return that substantially understated the tax because of a grossly erroneous item of one spouse;
- the other spouse did not know, and had no reason to know, of this understatement; and
- taking all the facts and circumstances into account, it would be unfair to hold the other spouse liable for the additional tax.
More details, including specific definitions of a substantial
understatement of tax and grossly erroneous items, are in the
instructions to Form 8857 and IRS Publication 971, "Innocent Spouse
Initiatives to Provide Relief to Innocent Spouses
The Treasury Department and the IRS are working to solve the tax
liability issues affecting innocent spouses. "it is imperative that
we protect taxpayers whose spouses violate the tax laws without
their knowledge and Treasury and the IRS are taking steps to achieve
this goal," said Treasury Secretary Robert E. Rubin. "Many in
Congress have been focused on addressing this issue, and we are
committed to working with them to find a solution."
Administrative Actions from Treasury and IRS
Treasury and the IRS are implementing new initiatives to expand
and protect taxpayer rights:
1. New IRS Form 8857, "Request for Innocent Spouse Relief," is
available to assist taxpayers in preparing claims for relief under
the innocent spouse provisions. This form is processed in one
central location to ensure the technical expertise of the IRS
examiners and consistent treatment for taxpayers.
2. The IRS will review current training materials to ensure that
they stress the IRS employee's responsibility to identify situations
where the innocent spouse provisions might apply, even if the
taxpayer does not know about the provisions. When appropriate, the
employee will give these taxpayers Form 8857 and help them prepare
3. Special training courses on the innocent spouse provisions will
be given to IRS collection and examination personnel in both basic
training as well as annual continuing professional education.
Telephone assistors specially trained in the innocent spouse
provisions will be available to answer questions from taxpayers who
call the IRS' toll-free tax help number.
4. The IRS will revise its federal income tax packages and other
publications to alert couples who file joint returns of the legal
consequences of joint filing and make innocent spouses aware of the
relief provisions available to them.
5. To help identify those who might qualify for relief under the
innocent spouse provisions, the IRS will reach out at both the
national and local levels to community organizations that serve
abused or battered spouses.
6. The IRS has strengthened the authority of the Taxpayer Advocate
to intervene in innocent spouse cases. Taxpayers who feel they have
nowhere to turn should be aware that they can seek assistance from
the IRS' Taxpayer Advocate.
Legislative Proposals for Fiscal Year 1999
Some initiatives cannot simply be implemented, but must be
enacted by Congress. President Clinton proposed several legislative
initiatives last October that were included in the Fiscal Year 1999
If enacted, these initiatives would include: automatically
suspending collection efforts against one spouse when the other is
contesting a proposed joint assessment in Tax Court; giving more
taxpayers who are denied innocent spouse relief by the IRS an
opportunity to appeal the IRS decision to Tax Court; and
automatically suspending collection while the Tax Court considers
Another initiative would make innocent spouse relief easier to
obtain by changing statutory standards to help additional taxpayers,
including those with smaller tax bills, who are presently ineligible
for relief in many cases.
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